Job growth is strong, but inflation remains high
(CNN) - The month of September closed out with positive job growth; the economy adding 263,000 jobs and unemployment dropping to 3.5%.
“This is the progress we need to see."
President Joe Biden praised the report. However, it comes as the cost of everything, from food to rent is much higher unlike last year.
“The thing that’s hurting people of course is inflation," Justin Wolfers, Economics Professor at the University of Michigan, spoke.
Accordingly, to try to slow inflation, the Federal Reserve has been raising interest rates to make borrowing more expensive. One economist says Friday’s data shows that plan could be working.
“This has been a key goal of the Federal Reserve. They’re worried the economy was running too hot. They wanted a so-called soft landing. Well, if you wanted to tell the first chapter of that soft landing story it would pretty much be the set of numbers we saw," Wolfers explained.
But, a recent survey asked 400 CEO’s of large U.S. companies about the economic outlook: 91% predict a recession in the next 12 months.
Moreover, wages aren’t rising nearly as high as inflation. So, employees are asking for more money so they can afford goods.
Increasing wages is something the Federal Reserve wants to slow down, fearing that would pump more money into the economy and make inflation worse.
But, the Biden Administration wants to see those wages rise.
"My job is to try and get as many people into work as possible, get them into better paying jobs and some middle-class jobs and continue to hopefully work with businesses and labor to increase wages over time and benefits,” Marty Walsh, U.S. Labor Secretary, said.