In recent economic news from the United States, the September employment report exceeded expectations with the addition of 254,000 non-farm jobs, marking the largest monthly increase in six months. The unemployment rate also dipped to 4.1%, down from the previous month’s 4.2%. This positive trend was accompanied by an acceleration in wage growth, as average hourly wages in September rose by 4.0%, reaching a four-month high compared to the revised 3.9% from before.
On the flip side, the labor market is experiencing low recruiting and separation rates, causing a slowdown in labor force mobility and a weakening of the employment market vitality. According to data from the Bureau of Labor Statistics, the recruitment rate dropped to 3.3% in August, the lowest growth rate since October 2013, while the layoff rate remained low at 1%.
Analysts attribute this stagnation in the U.S. job market to companies being hesitant to hire more employees, workers being reluctant to quit easily, and reduced opportunities for staff promotions and business development. The uncertainty surrounding economic prospects has left businesses hesitant about expanding their operations or opting for a more conservative approach.
In light of the latest employment data release, Goldman Sachs has reduced the likelihood of the U.S. falling into a recession in the next 12 months to 15%, down by 5 percentage points. While it is believed that the Federal Reserve has stabilized the job market, it is still premature to draw conclusive results. Expectations for a soft landing of the U.S. economy are rising, with the possibility of both the November and December Federal Reserve meetings resulting in only a 0.25 percentage point interest rate cut.
Furthermore, the U.S. Consumer Price Index (CPI) showed a slight uptick in September, with a monthly increase of 0.2%, slightly higher than the market’s expectation of 0.1%. The core CPI, which excludes volatile items like food and energy, also rose by 0.3% for the month, surpassing the market’s anticipated 0.2% increase.
Commenting on the economic data fluctuations, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, expressed open-mindedness about the upcoming November meeting, hinting that there might be no interest rate cut or just a modest 0.25 percentage point reduction.