The economy added just 29,000 new payroll jobs in September, the Bureau of Labor Statistics reported Friday, as growth slowed amid the continued energy supply shock from the war with Iran.
The unemployment rate rose a tenth of a percentage point to 4.2%.
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Forecasters had expected payroll job growth to be 89,000.
The employment reports for both July and August were also revised down, and a combined 60,000 lower than previously reported.
Friday’s report highlights the challenge the economy presents for President Donald Trump, who has been weighed down by historically low consumer sentiment and voter frustration over too-high inflation and affordability concerns.
Much of the recent surge in prices is a result of higher energy prices stemming from the war in Iran, which began earlier this year and sent gasoline prices much higher, dragging up overall headline inflation.
Months later, the conflict is still not fully resolved and has been characterized by start-and-stop negotiations and many open questions. The halt of oil tankers through the Strait of Hormuz at various times has further exacerbated the energy supply shock.
The September jobs report adds to Trump’s list of economic concerns — a slowdown in the labor market is very unwelcome for Republicans heading into the midterm elections.
The Federal Reserve has also received outsize attention given this year’s surge in inflation following the start of the Iran war.
The Fed, under new Chairman Kevin Warsh, opted to hold interest rates steady at all of its meetings so far, but at its most recent meeting, voted to raise interest rates — despite pressure from Trump for the Fed to do the opposite.
Also, after the August jobs report, which came in hot, Trump posted on Truth Social and called for lower interest rates and threatened to cut off trade to countries with which the U.S. has a trade deficit.
Despite that threat, the Fed went ahead and voted unanimously to raise interest rates.
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Warsh, speaking at a press conference in Washington after the latest rate decision, was asked by the Washington Examiner about whether the decision to proceed with raising rates despite Trump’s lobbying for a rate cut could be seen as a test of the Fed’s independence.
“Part of the independence of the Federal Reserve is that we stay in our lane,” the chairman said. “Independence is a two-way street. We let people that do trade policy and fiscal policy stay in their lane, too. That’s how we can stand up here and call them [the] way we see them.”
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[ H/T Washington Examiner ]
