September Jobs Report Commentary from MBA's Mike Fratantoni
The following is Mortgage Bankers Association (MBA) Senior Vice President and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in September:
“Job growth has averaged 420,000 per month in 2022. While the pace of growth slowed in September to 263,000, this is still faster than can be sustained in the US economy over time. And other data clearly signaling a slowing economy lead us to forecast a sharp drop in job growth over the coming months.
“The unemployment rate dipped back to 3.5%, equal to the pre-pandemic low, and wage growth remains strong with average hourly earnings up 5% over the past year. The household sector is in strong shape, which should help to mitigate the extent of an economic downturn.
“The number of job openings decreased in August sharply. This does suggest that employers are first moving to eliminate those openings and slow the pace of hiring before turning to layoffs as the economy cools.
“We expect the Federal Reserve will increase rates by at least another 50 basis points in November and could do more if inflation fails to decelerate.”