Oct 7, 2022 - Economy

U.S. economy adds 263,000 jobs in September

A "now hiring" sign at a Home Depot store in San Rafael, CA. Photo: Justin Sullivan/Getty Images

The U.S. economy added 263,000 payrolls in September, while the unemployment rate fell from 3.7% to 3.5% — a half-century low, the government said on Friday.

Why it matters: Monthly job gains have slowed from the breakneck pace that defined the pandemic recovery. But the labor market so far remains on solid footing and companies still have strong demand for workers.

  • In an attempt to put a lid on decades-high inflation, the Fed has upped interest rates at a rapid pace: five times since March, including three consecutive hikes by three-quarters of a percentage point each, a super-sized amount.
  • Fed officials see slower jobs growth as a welcome development in their war on inflation. They are looking for signs of waning demand across the economy, including in the labor market.
  • Chair Jerome Powell warned there would be "pain" ahead for households as the Fed tries to bring inflation down.

Driving the news: September's jobs gains were roughly in line with what economists expected. It's a slight slowdown from the 315,000 jobs added in August.

  • Average hourly earnings, a proxy for wage growth, rose by 0.3% in September — the same pace as the prior month.
  • The share of people working or looking for work, known as the labor force participation rate, was largely unchanged at 62.3%.
Go deeper