Fed seen skipping Oct rate hike as job market cools

Business Recorder reported that Federal Reserve policymakers received fresh reasons on Friday to hold off on another interest rate increase in their fight against inflation. The rationale came from US government figures showing hiring is losing momentum and the jobless rate edged higher. Employers added only 29,000 positions in September, well short of the 90,000 economists had forecast, and earlier August gains were scaled back.

The jobless rate for September rose to 4.2 per cent from 4.1 per cent, and wage increases also cooled. Business Recorder noted that the release is the last broad labour market reading before the November elections, which will help decide whether President Donald Trump's Republican party retains control of both chambers of Congress. Voters have grown sour on the economy as living costs and borrowing costs stay high, even though overall growth has remained solid.

The Fed lifted its benchmark borrowing costs by a quarter point in September to steer inflation back toward its 2 per cent goal. Policymakers have signalled that another increase is likely before the end of the year, but only if the Iran war and other price pressures continue and the labour market holds steady. The softer jobs data gives policymakers more room to hold off for now.