WASHINGTON, Oct 6 (Reuters) – U.S. employers in September turned their back on Federal Reserve officials who have been expecting job growth to cool, adding 336,000 positions in a return to the fevered hiring seen during the coronavirus pandemic and potentially bolstering the case for another interest rate increase.
Upward revisions to the July and August job totals showed stronger job gains in those months as well, to the tune of 119,000 additional positions, enough to turn what had seemed like a slowdown in hiring into an analytical headache for the U.S. central bank.
Investors only slightly boosted bets that the Fed will lift the target federal funds rate by another quarter of a percentage point to the 5.50%-5.75% range by the end of this year, as economists noted that wage growth remained muted and upcoming inflation data was expected to show continued slowing.
The Fed will hold its next policy meeting on Oct. 31-Nov. 1.
“Payroll growth was impressive in September, but the underlying details are not as robust. Wage growth has downshifted,” with average hourly earnings rising only 0.2% on a month-to-month basis, said Thomas Simons, a senior economist at Jefferies. “We do not think that this is going to sway the Fed towards a rate hike on Nov. 1, but the inflation data next week could push the scales.”
But the September report still highlighted just how resilient the U.S. economy has remained in the face of the fastest Fed rate hikes in a generation. Using the central bank’s…
