Stocks fall as solid jobs report raises fears of more Fed rate cuts

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NEW YORK (AP) — Losses are accelerating on Wall Street on worries that a still-strong U.S jobs market may actually make a recession more likely.

The S&P 500 fell 2.8% Friday after the government said employers hired more workers last month than expected. The Dow Jones Industrial Average and the Nasdaq also fell sharply, and Treasury yields rose.

America’s employers slowed their hiring in September but still added 263,000 jobs, a solid figure that will likely keep the Federal Reserve on pace to keep raising interest rates aggressively to fight persistently high inflation.

Hiring fell from 315,000 in August to the weakest monthly gain since April 2021. The unemployment rate fell from 3.7% to 3.5%, matching a half-century low.

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The Fed is hoping that a slower pace of hiring would eventually mean less pressure on employers to raise pay and pass those costs on to their customers through price increases — a recipe for high inflation. But September’s job growth was likely too robust to satisfy the central bank’s inflation fighters.

With the Fed more likely to keep raising borrowing costs rapidly, the risk of recession will also rise.

Wall Street is worried the Federal Reserve could see the jobs report as proof the economy hasn’t slowed enough yet to get inflation under control.

 

 

 

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