The Jobs report shows signs of hope in the fight against inflation

Kansas City, Mo. – The US Labor Department said employment growth slowed in August, evidence that higher interest rates may be helping to fight inflation.

The Federal Reserve Bank faces a difficult task in trying to slow price increases without throwing too many people out of work.

Fed bankers can see some evidence in these jobs to report that higher interest rates are starting to cool an overheated economy and reduce inflation.

The Labor Department said employers added 315,000 jobs in August and the government said more people are returning to the workforce.

The labor force participation rate rose three-tenths of a percentage point, another encouraging sign.

All this means that the nation has now created more jobs than the 22-million lost at the start of the pandemic in 2020.

This happened while the national unemployment rate increased slightly in August to 3.7%, which is still near a 50-year low.

“Overall it’s a good jobs report,” said Frank Lenk, an economist at the Mid America Regional Council. “Strong enough to keep the labor market in good shape but not as high as the Fed wants to see. It’s still not where they want it to be, so I’m guessing we’ll continue to see some rate increases.

The Federal Reserve has been raising interest rates to put a brake on price increases and slow economic growth.

Higher interest rates make it more expensive for people and businesses to borrow and spend.

“We want to see healthy gains in jobs across all industries,” said Heather Boushey, a member of President Joe Biden’s Council of Economic Advisers. “We want to see real wage gains for workers because of high inflation. Although wages have risen they are not enough to keep pace. But when we recover from this historic pandemic, when we get all people back into the labor force that has always been there, we will return to see the economy find the right balance and hopefully pull this high inflation down.

Fed bankers are still expected to consider yet another interest rate hike later this month as inflation continues at the highest level seen in 40 years.

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