The unemployment rate dropped to 4.1% from 4.2%, marking another positive development in the labour market.
Average hourly earnings increased by 0.4% in September, bringing the year-on-year wage growth to 4.0%, maintaining steady income gains. These stronger-than-expected results reflect a resilient economy despite high interest rates.
The Federal Reserve, which began easing its rate policy with a half-percentage-point cut last month, may now adopt a more cautious approach to further rate reductions. Fed Chair Jerome Powell has signalled that the central bank is not in a rush to cut rates aggressively, citing the labour market’s ongoing stability.
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While the job market remains strong, the pace of hiring has slowed due to increased labour supply, particularly driven by rising immigration. Layoffs, however, continue to be minimal, supporting consumer spending and economic growth.
External factors like the recent Boeing machinists’ strike and Hurricane Helene’s devastation in the Southeast could cause temporary turbulence in the coming months. Still, with the US economy performing better than previously estimated, policymakers are expected to proceed cautiously with any future rate cuts.
Financial markets currently estimate a 71.5% chance of a quarter-point rate cut at the Federal Reserve’s November meeting, while the odds of a larger reduction remain lower.