What this week’s jobs numbers tell us
The unemployment rate is at a half-century low of 3.5%, the Labor Department said this morning. That’s good news.
And the rate of new job growth fell from 315,000 in August to 263,000 in September. But that’s good news too.
The major relief programs of the pandemic and the swift post-COVID employment recovery put the economy at risk of overheating. Economists warned that the federal government was spending too much money, while low unemployment drove up costs to hirers. This resulted in the highest inflation rates since the early 1980s.
The Federal Reserve, which had kept interest rates at or near zero during the pandemic, sprang into action this year, raising rates three times. Prices began to fall, but Fed Chair Jerome Powell warned that there would be “some pain” for job-seekers.
So far, inflation appears to be declining, while the job market remains strong. But it’s a delicate balance and it’s no sure thing the Fed will be able to maintain it in the months ahead.
No Labels tracks consumer prices each month in our Kitchen Table Index. To be sure to see all of our analysis of inflation and the economy, follow us on Facebook.