US Labor Market Expected to Slow Down in September Amid Global Headwinds

The US labor market is expected to slow down in September, according to economists. The unemployment rate is forecast to remain steady at 4.1% for a third consecutive month. This would be a moderation from the surprise jump in nonfarm payrolls in August, which was partly attributed to volatility in seasonal fluctuations.

Economists predict that nonfarm payrolls will increase by around 90,000 last month, after surging by 162,000 in August. The Labor Department's Bureau of Labor Statistics is set to release its employment report on Friday.

The slowdown in job growth could be due to the growing headwinds from the conflict in the Middle East, including high energy prices and strained supply chains. However, economists note that robust corporate profit growth and resilient domestic demand are currently shielding workers from layoffs.

Despite the moderation in employment growth, wages are expected to have increased 3.2% on a year-over-year basis in September, indicating that the labor market is not a source of inflation. The US central bank last month raised its benchmark overnight interest rate by 25 basis points to the 3.75%-4.00% range.