As a series of massive interest rate hikes spread throughout the U.S. economy, job growth slowed for a second month in September.
However, policymakers are not expected to be deterred from taking forceful monetary action to combat inflation, which is still at a decades-high level.
For Fed officials attempting to calm down an exceptionally tight labour market that has increased wage pressure and contributed to rising prices, the cooling in the employment figures for September is a good development.
The print, however, is still significantly larger than the 150,000–200,000 average that was common prior to the pandemic, giving the U.S. central bank flexibility to continue with significant rate rises.
Seema Shah, the chief global strategist at Principal Global Investors, wrote in a note that "today's job number is a hawkish reading, with practically all the parts of the report heading in the wrong direction for the Fed."
On Friday, as investors processed the data in the hopes that a larger decrease in the headline number would prompt a quicker change in policy, stocks plummeted and Treasury yields shot up.