New York The Voice —
The US job market is still piping hot. That’s raising questions about how fast inflation will continue to cool.
The economy added a staggering 254,000 jobs in September, according to Friday data from the Bureau of Labor Statistics. That blew past expectations of 140,000 job gains from economists polled by FactSet, and marked a jump from August’s upwardly revised 159,000 tally. The unemployment rate edged lower to 4.1% from 4.2%.
That comes after the Federal Reserve last month cut interest rates by a jumbo half-point, signaling that it is turning its attention from tamping down inflation to keeping the job market steady. Following the strong labor report, traders raised their bets for a quarter-point cut in November, as opposed to a more drastic half-point cut, according to the CME FedWatch Tool.
Investors say the better-than-expected jobs report suggests that a soft landing, or a scenario in which inflation is tamed without a recession, is in reach. But some warn that a still-strong labor market could make it more difficult for inflation to continue cooling. That’s because a low unemployment rate and hot job market underline a strong American consumer, whose spending helps drive up the cost of goods and services.