NFP Data Exceeds Expectations in October 2022

US employment data is still strong in September 2022, although it tends to slope from the previous month. The unemployment rate also fell.

These positive employment data suggest the labor market remains tight and has proven resilient to the Federal Reserve's benchmark interest rate hikes.

Reporting from Bloomberg on Friday (10/7/2022), the US Department of Labor reported that Nonfarm Payrolls (NFP) data rise 263,000 in September, the smallest monthly increase since April 2021 and lower than the 315,000 increase in August. The Fed Gives Code To Raise Interest Rates Until Early 2023

Meanwhile, the unemployment rate unexpectedly fell to 3.5 percent to its lowest level in five decades. Average hourly earnings have also increased.

The increase in NFP is higher than the median projection of economists in a Bloomberg survey of 255,000. The projected unemployment rate is 3.7 percent. Recruitment on a relatively broad basis, led by increases in tourism, hospitality, and healthcare sector hiring.

This NFP data is the latest illustration of the strength of the US labor market. Despite indications that labor demand is starting to slow down, especially with the decline in job openings, many companies are still understaffed and continue to hire workers at a solid pace.

These forces not only underpin consumer spending but also drive wage growth as businesses compete for workers.

On the other hand, the Fed expects a significant weakening in labor market conditions, with the aim of cooling wage growth and inflation.

The September employment data is the last data the Fed is waiting for before its November policy meeting, where the US central bank considers a further 75 basis point rate hike. Next week's inflation data will also be the focus of the Fed in their decision-making.