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Unemployment rate ticks down as US adds 263K jobs

Job Openings now hiring song
Posted at 5:48 AM, Oct 07, 2022
and last updated 2022-10-07 16:24:35-04

The U.S. unemployment rate dropped to 3.5% as the U.S. added 263,000 jobs in September compared to August, new data from the Bureau of Labor Statistics show.

The 3.5% unemployment rate is equal to the lowest rate in recent years. The unemployment rate has gotten as low as 3.5% several times in the last few years but has not been below 3.5% since 1953. The unemployment rate was 3.7% in August.

September's job growth is the lowest in more than a year, but several industries saw substantial gains in their workforce. The health care industry gained 60,000 workers. Staffing levels are now back where they were pre-pandemic.

"[Health care] is one of the areas we saw a decrease in terms of job postings earlier this week," Blumsack said. "It's nice to see more employment and lower job postings, which signals we could be getting closer to equilbrium in that particular sector."

The increase in hiring is only partially responsible for the lower unemployment rate. The other piece is a smaller overall talent pool.

More than 150,000 teenagers left the labor force in September. This is fairly common at the end of the summer months. But there were also close to 400,000 women who left the labor force, slashing the number of potential candidates for hiring businesses.

"So on one hand, there are signs that things are slowing down, in terms of the number of jobs that we are creating," Blumsack said. "But on the flip side, you would expect to see the unemployment rate tick up, and the participation rate tick up. We didn't see that."

The smaller field of candidates creates opportunities for people looking to switch jobs or reenter the market.

“This is a time in your life where you actually want to be the most confident you’ve ever been,” said Kathleen Cameron, CEO and founder of Diamond Academy Coaching. “You need to see all of those possibilities available.”

But the relative strength of the labor market could ultimately be bad news for anyone looking to borrow money. Analysts point to the current climate as a sign that the Federal Reserve will continue raising interest rates at their upcoming meeting in November.

Fed officials themselves have said they expect interest rates to rise by 125 basis points between now and the end of the year.

"It's probably stay the course, from a Fed perspective," said Scott Blumsack, chief strategy officer at Monster. "I don't think there is anything in this report that will cause them to dramatically change their approach. I don't think they'll accelerate more than they have been, but I also don't think they're going to take their foot off the gas."

The rapid pace of interest rate hikes is driving up the cost of car loans, mortgages and credit card debt. Rates for all three are at their highest levels in at least a decade.

The interest for a loan on a new, base-model Honda Civic would cost $1,100 more today than it did in January.