Biden touts resilience of US economy after modest job gains

Stocks sink as gains blunt expectations Federal Reserve will moderate pace of rate increases

Biden touts US economy as job report shows modest gains

Biden touts US economy as job report shows modest gains
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US hiring continued at a moderate pace last month, showing that the labour market remains tight despite the Federal Reserve's historic interest rate rises.

Stocks sank fell and bond yields climbed on Friday after data showing a still solid US labour market threw cold water on expectations the Fed would soon moderate its pace of rate increases to prevent a more significant economic slowdown.

Non-farm payrolls increased by 263,000 jobs in the month of September, a report from the US Labour Department showed, slightly higher than projected.

The unemployment rate dropped to 3.5 per cent. Average hourly wages also rose.

President Joe Biden said the latest report brings the total amount of jobs he has created since entering office last year to 10 million.

“Our job market continues to show resilience as we navigate through this economic transition we're in,” Mr Biden in remarks at a Volvo factory in Maryland.

The report showed that last month's job growth was down from 315,000 on the previous month.

Friday's report follows news that US job openings fell to 10.1 million in August, down from 11.2 million in July.

Fed chairman Jerome Powell has said the US central bank is hoping for labour conditions that would eventually cool wage growth and ease inflation.

In an aggressive attempt to cool inflation, the Fed has raised its interest rates five times this year. More interest rates are likely to come before the end of the calendar year as well, Mr Powell said.

He has said that households and business would feel “some pain” as the central bank brings inflation back down to its 2 per cent target. Inflation in the US was reported at 8.3 per cent, above expectations.

“We need to bring inflation down without giving up all historic economic progress that working-class and middle-class people have made,” Mr Biden said.

Mr Powell and Mr Biden remain hopeful that the Fed will achieve a so-called soft landing — slowing growth enough to tame inflation without plunging the economy into recession.

But doing so is a historically difficult task, one that could be decided by external factors such as a weakening of food supply because of Russia's war in Ukraine.

The Fed will meet next month as it considers imposing a fourth straight 75-basis point interest-rate increase.

Updated: October 07, 2022, 11:20 PM