The US job market is still kicking off plenty of heat, with hiring surging by a surprisingly high 336,000 positions last month; however, wages are cooling off.
Average hourly earnings rose by 0.2% in September, bringing the annual gain to 4.2%, according to the Bureau of Labor Statistics' jobs report released Friday.
That lands below economists' expectations for a monthly uptick of 0.3% and annual increase of 4.3%, according to Refinitiv.
September's wage growth is the lowest seen monthly since February 2022 and year-over-year since June 2021, noted Andrew Patterson, Vanguard senior economist.
"Like most reports, the Fed will find things to like and dislike here," Patterson wrote Friday. "Inflation data will weigh heavily this month ahead of [the Fed's next meeting on October 31 and November 1]."
The Federal Reserve has wanted to see an easing in labor market activity and, especially, wage growth as those fuel consumer demand and could put upward pressure on inflation.
Inflation gauges closely tracked by the Fed have cooled significantly since hitting highs last year; however, they've been easing at a slower pace in recent months, thanks in part to a pickup in gas prices.
Still, cooling inflation has helped Americans finally see real wage growth in recent months.