A month before voters cast their votes, the U.S. Bureau of Labor Statistics released a report showing a strong labor market, with rising wages, falling unemployment and adding 254,000 jobs to the economy.
A September report from Pew Research found that 81% of registered voters say the economy will be key to their presidential vote this fall.
Kitty Richards, senior strategic advisor at the Groundwork Collaborative, a progressive economic policy think tank, said: “Job creation has exceeded expectations, the unemployment rate is the lowest it’s ever been, and wages have significantly outpaced inflation. It continues to grow.” “Although we don’t have any new inflation data for the last month, wage growth has been strong and has outpaced inflation for about 16 months. These are all really good things.”
The unemployment rate was 4.1% in September, 4.2% in August, and 4.3% in July. Some economists were concerned that the Federal Reserve’s decision not to cut the federal funds rate in recent months was starting to have a negative impact on the labor market after the unemployment rate rose at the start of the year. The Fed eased those concerns in September by cutting interest rates by 0.5 percentage point.
Although the Fed began an aggressive campaign to curb inflation by raising interest rates in March 2022 and halted it in mid-2023, interest rate hikes remain high, impacting the economy, especially the housing market. economists point out. Inflation has fallen significantly since its peak in June 2022.
“If today’s employment report had said the labor market was softening further, many of us would be more actively concerned about the risks that high interest rates pose to the labor market,” Richards said. said. “It’s great that those risks haven’t tipped yet…but the risks are there and we need to really consider what that means if unemployment starts to rise again.”
The report also showed continued employment growth in the health care, government, social assistance and construction sectors last month. Wage growth has been steady, rising 4% over the past year. The unemployment rate for adult men fell to 3.7% last month. Women, blacks, Asians, whites, Hispanics and teenagers all saw little change in their unemployment rates in September.
The employment-to-population ratio for the prime-age population, an indicator of how well the economy is providing jobs to people who want to work, remains at its highest level in 23 years in today’s employment statistics.
“I think the labor market remains healthy and strong. It’s great to see that labor force participation and employment as a percentage of population remain high,” Richards said. “That’s what we want to see in the economy, which is driving wage increases for working people and continuing some of the gains we’ve seen since the coronavirus recession.”
However, he added that there is still room for growth in these measures.
“We have seen that the economy could grow more than many people thought before the low unemployment rates of the COVID-19 recession lasted a really long time. I hope that continues in the future,” she said.
