The U.S. labor market is showing signs of cooling, with job growth slowing and the unemployment rate rising in September, according to a report released Friday. The economy added 145,000 jobs last month, down from 182,000 in August, the Labor Department said. The unemployment rate ticked up to 3.6 percent from 3.5 percent.
The slowdown in job growth is a sign that the Federal Reserve’s interest rate hikes are beginning to have an impact on the economy. The Fed has raised rates aggressively over the past year in an effort to curb inflation.
“The labor market is still strong, but it is starting to show signs of fatigue,” said Michael Gapen, head of U.S. economic research at Bank of America. “We expect job growth to continue to slow in the coming months.”
The report also showed that wage growth slowed in September, rising 0.2 percent from the previous month. This is a positive sign for the Fed, as it suggests that wage pressures are easing.
Despite the slowdown in job growth, the labor market remains relatively tight. There are still more job openings than unemployed workers.
“The labor market is still in a good place, but it is not as strong as it was a few months ago,” said Kathy Bostjancic, chief economist at Nationwide. “We expect the labor market to continue to moderate in the coming months.”
The report is likely to be closely watched by the Fed as it considers its next move on interest rates. The Fed is scheduled to meet next month to decide whether to raise rates again.
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