US jobs growth slows as policymakers fight inflation

Jobs growth in the US has slowed for a second month, in a sign that the labour market in the world’s largest economy may be starting to cool.

US employers added 263,000 new jobs in September, the fewest since April 2021.

Despite the lower figure, analysts said the US central bank will need to do more to slow the economy if it wants to rein in rapidly rising prices.

The dollar strengthened following the report, as investors expect interest rates to continue to rise.

This strengthening pushed the pound down to $1.11, having been above $1.12 before the jobs figures were released.

The labour market in the US is being closely watched, as the US central bank raises borrowing costs sharply.

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Officials hope the higher interest rates will cool demand for big-ticket items such as homes and cars, and ease the pressures that are pushing up prices at the fastest pace since the 1980s.

They have warned that the slowdown in activity is likely to lead to some job loss, but say they hope to avoid a sharp economic downturn.

Analysts said that Friday’s report from the US Labor Department showed the jobs market remains relatively tight, as a backlog of unfilled positions pushes companies to continue to hire despite fears of wider economic slowdown.

Restaurants, bars and health care firms led the job gains last month, while the unemployment rate fell from 3.7% in August to 3.5%, returning to a 50-year low.

-BBC

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