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US jobs growth slows as policymakers fight inflation US jobs growth slows as policymakers fight inflation
(32 minutes later)
Jobs growth in the US has slowed for a second month, in a sign that the labour market in the world's largest economy may be starting to cool.Jobs growth in the US has slowed for a second month, in a sign that the labour market in the world's largest economy may be starting to cool.
US employers added 263,000 new jobs in September, which is almost half the average number seen so far this year.US employers added 263,000 new jobs in September, which is almost half the average number seen so far this year.
The US central bank has said some slowdown in hiring will be necessary to rein in prices that are rising at the most rapid pace since the 1980s. Despite the slowdown, analysts said the US central bank will need to do more to rein in rapidly rising prices.
But they are trying to avoid a sharp economic downturn, or recession. The dollar strengthened following the report, as investors expect interest rates to continue to rise.
Analysts said that Friday's report from the US Labor Department showed the jobs market remains tight, pointing to the unemployment rate that fell from 3.7% in August to 3.5% last month. This strengthening pushed the pound down to $1.11, having been above $1.12 before the jobs figures were released.
They said the report was likely to reinforce the central bank's commitment to increasing interest rates to tackle rising prices. The labour market in the US is being closely watched, as the US central bank raises borrowing costs sharply.
The dollar, which has strengthened alongside higher US interest rates, rose following the report, pushing the pound and other currencies lower. When will US food prices come down?
The pound slipped to $1.11 following the release of the US jobs figures, having been above $1.12 before. Is the US in a recession?
Officials hope the higher interest rates will cool demand for big-ticket items such as homes, cars and business expansions and ease the pressures that are pushing up prices at the fastest pace since the 1980s.
They have warned that the slowdown in activity is likely to lead to some job loss, but they hope to avoid a sharp economic downturn.
Analysts said that Friday's report from the US Labor Department showed the jobs market remains relatively tight.
The unemployment rate fell from 3.7% in August to 3.5% last month, as restaurants, bars and health care firms continued to hire.
"Although this month's jobs report is weaker than the figures recorded last month, the labour market remains relatively strong," said Richard Flynn, managing director at Charles Schwab UK.
"The Fed has been increasingly clear that substantial weakness in the economy may be the expense for a return to lower inflation. As rate hikes feed through to the real economy in the months ahead, the labour market may weaken further, reflecting investors' recessionary concerns."