WASHINGTON (NEXSTAR) — A mixed bag for the economy Friday: The national jobs report for showed a decrease in unemployment but stocks tumbled as investors anticipate more aggressive interest rate hikes from the Federal Reserve.
Employers added 263,000 jobs to the economy in September, the jobs report showed, though it also showed a slowdown in hiring. President Joe Biden celebrated the report, calling it “the progress we need to see,” and said he remains optimistic about the state of the economy.
“Our job market continues to show resilience,” he said.
White House economist Jared Bernstein said the report was good news for Americans headed into the holidays.
“The idea of going into that with an unemployment rate of 3.5% … that means people should continue to have very ample employment opportunities to bring home paychecks they’re going to need to have a good holiday season,” he said.
E.J. Antoni, an economist with the conservative Heritage Foundation said the administration’s outlook was shortsighted.
“The third quarter of economic growth looks definitely looks like it’s going to be positive, but after that, all bets are off,” he said.
He fears the labor market should shrink in coming months as the Fed continues to raise interest rates to slow inflation.
“That makes borrowing more expensive on everything,” he said. “That means businesses are going to continue to hire fewer people until they ultimately stop hiring and then the layoffs begin.”
Stock indexes dropped sharply Friday, with investors also apparently eying those interest rate hikes, which could be announced when the Fed meets next month.
“What’s good for main street is bad for Wall Street,” Bernstein suggested. “But they’re looking over their shoulder at the Federal Reserve.”
He said the Biden administration supports the Fed’s actions.
“What we have to do on our side is make sure working families stay ahead,” he said.