And the Fed is trying to accomplish it at a perilous time. Some economists remain hopeful that despite the persistent inflation pressures, the Fed will still manage to achieve a so-called soft landing: Slowing growth enough to tame inflation, without going so far as to tip the economy into recession. In August, consumers spent a bit more than in July, a sign that the economy was holding up despite rising borrowing rates, violent swings in the stock market and inflated prices for food, rent and other essentials.įed Chair Jerome Powell has warned bluntly that the inflation fight will “bring some pain,” notably in the form of layoffs and higher unemployment.
#Bartender 10.1 key driver#
And for now, consumer spending - the primary driver of the U.S. In August, one key measure of year-over-year inflation, the consumer price index, amounted to 8.3%. It is aiming to slow economic growth enough to reduce annual price increases back toward its 2% target.
In its epic battle to rein in inflation, the Fed has raised its benchmark interest rate five times this year. The public anxiety that has arisen over high prices and the prospect of a recession is also carrying political consequences as President Joe Biden’s Democratic Party struggles to maintain control of Congress in November’s midterm elections. And the yield on the 2-year Treasury note, which tends to track expectations for Fed actions, rose to 4.31% from 4.26% late Thursday. The S&P 500 index sank 1.9% in early trading. On Wall Street, stocks tumbled Friday morning - a sign that investors foresee more aggressive Fed rate hikes ahead. economist at High Frequency Economics, said she didn't think September's softer jobs and wage numbers would stop the Fed from raising its benchmark short-term rate in November by an unusually large three-quarters of a point for a fourth consecutive time - and by an additional half-point in December.
The jobs report “was still likely too strong to allow (Fed) policymakers much breathing room," said Matt Peron, director of research at Janus Henderson Investors. The proportion of Americans who either have a job or are looking for one slipped slightly, a disappointment for those hoping that more people would enter the labor force and help ease worker shortages and upward pressure on wages. Last month, hourly wages rose 5% from a year earlier, the slowest year-over-year pace since December but still hotter than the Fed would want. But September's job growth was likely too robust to satisfy the central bank's inflation fighters. The Fed is hoping that a slower pace of hiring would eventually mean less pressure on employers to raise pay and pass those costs on to their customers through price increases - a recipe for high inflation.
The unemployment rate dropped from 3.7% to 3.5%, matching a half-century low. WASHINGTON (AP) - America’s employers slowed their hiring in September but still added 263,000 jobs, a solid figure that will likely keep the Federal Reserve on pace to keep raising interest rates aggressively to fight persistently high inflation.įriday’s government report showed that hiring fell from 315,000 in August to the weakest monthly gain since April 2021.
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