The US economy created fewer jobs last month: 263,000, compared to 315,000 in August, the US Department of Labor said on Friday.

With new hires, particularly in the leisure, hotel and health services sectors.

But it is especially on the side of hourly wages that we must look, to observe a sign of slowdown.

Indeed, these increased by 5% over one year, their lowest rate since December 2021.

Employers, who face a major labor shortage, are offering higher and higher salaries to attract candidates and retain their employees.

And that helps fuel inflation.

The unemployment rate, on the other hand, fell slightly, falling back to 3.5%, its July level, which was also that of February 2020, the lowest in 50 years.

It was 3.7% in August.

"Our labor market continues to show resilience as we go through this economic transition" towards "a stable recovery", welcomed US President Joe Biden, visiting a factory of the automaker Volvo in Hagerstown (Maryland).

“We need to reduce inflation without giving up all the historic economic progress made by the working class and the middle class. And that is exactly what we are seeing,” he continued, referring to wages which “continue to grow for workers who deserve a raise".

"Coming Turbulence"

The employment situation is scrutinized, because it is linked to the fight against inflation.

A deterioration in the labor market is thus, paradoxically, desired and expected by the American central bank (Fed).

“The US labor market continues to slow, but there is no indication that it is stalling,” commented Nick Bunker, economist for the job search site Indeed, warning however of the potential “turbulence to come”.

However, the participation rate, which had increased a little in August, rejoicing employers in need of manpower, recorded a slight decline in September, to 62.3% (-0.1 point).

The US unemployment rate Jonathan WALTER AFP

And inequalities persist.

The unemployment rate for black workers remains almost double that of whites (5.8% against 3.1%).

The Fed is maneuvering to fight inflation.

It raises interest rates to slow down the economy by discouraging consumption and investment, at the risk, however, of provoking a recession.

“We are starting to see the effects of Fed rate hikes, but the labor market is still extremely strong,” tweeted Heidi Shierholz, president of the Economic policy institute (EPI), a progressive think tank.

"Basics of a strong labor market"

These figures should comfort the Fed, which will see "a reason to continue its aggressive pace of tightening" of financial conditions, anticipates Kathy Bostjancic, chief economist for Oxford Economics, in a note.

Several officials of the monetary institution have recently reaffirmed that the solidity of the employment market gives them room to strike hard against inflation.

A recruitment ad in front of a restaurant in Los Angeles (California) on August 17, 2022 Frederic J. BROWN AFP

“Policy must remain focused on restoring price stability, which will also lay the foundations for a strong and sustainable labor market,” Fed Governor Lisa Cook warned Thursday.

But several progressive economists are warning of the effects of further rate hikes.

“It takes some time for higher interest rates to have a big impact. (…) The Fed has already done enough to ensure a sharp drop in inflation”, underlines Heidi Shierholz, calling for an end to raise rates, or even reduce them.

The Federal Reserve must "ensure that it does not act too strong and does not cause an unnecessary and painful recession", adds Elise Gould, economist at the Institute of Economic Policy (EPI), an American think tank.

The next meeting of the Fed's monetary committee is scheduled for November 1-2.

By then, the September inflation data will have been released.

In August, the rise in prices had slowed down a little to 8.3% over one year, according to the CPI index, which refers.

The Fed favors another measure, the PCE index, which had shown a price increase of 6.2% over one year, also slowed down, but accelerating over one month.

© 2022 AFP