Employment growth in the US slows down, making it more difficult for the Fed rate hike
Employment growth in the US unexpectedly slowed for the third month in a row in September, which could make the Fed more cautious when raising the key rate.
The number of jobs outside the agricultural sector increased by 156,000 after a revised growth up to 167,000 in August, reported on Friday the Ministry of Labor. Economists polled by Reuters had expected increase in the number of employed in September at 175.000.
Fed Chairman Janet Yellen said that the economy needs to create at least 100,000 jobs a month to keep up with population growth. The average monthly increase in the number of jobs reached 180,000 this year. Yellen called such rates "unstable".
The unemployment rate rose to the tenth of a percentage point, to 5.0 percent, but this was due to return Americans to the ranks of job seekers.
Today's employment report - the last before the Fed meeting on November 1-2. Investors do not see almost no chance of raising the key rate at this meeting, given how close it is to the presidential elections to be held on 8 November.
Yellen said in September that the Fed is likely to raise rates once this year, but the prices for futures on federal funds indicate that the probability of increase only slightly higher chance that the regulator will leave it at that at the meeting in December.
Hourly wages of employees of the private sector increased by 2.6 percent in September year on year, as analysts had expected. Wage growth has accelerated over the last year, but still lower than before the 2008-2009 recession period.
Three Fed members voted for a rate hike in September, when the regulator has left policy unchanged. However, Friday's data may be an argument for those officials who advocate a cautious approach to policy tightening.
The presidential candidate of the Republican Donald Trump blames the Fed is that it is a political game, holding the lower rate. Yellen and other regulators reject this accusation.
As part of his election campaign, Trump promises to reverse the loss of jobs in American factories. Employment in the manufacturing sector fell by 13,000 in September, in addition, the sector has lost jobs three of the last five months.
At the same time, as a whole, the labor market continues to strengthen, albeit at a slow pace. This can become an asset in the arsenal of the Democratic candidate Hillary Clinton, who says that President Barack Obama, also a Democrat, helped the economy.
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