Evelyn Reynolds

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    In Provence, Winemakers Confront Climate Change

    “You can taste the climate change.”Frédéric Chaudière, a third-generation winemaker in the French village of Mormoiron, took a sip of white wine and set down his glass.The tastes of centuries-old varieties are being altered by spiking temperatures, scant rainfall, snap frosts and unpredictable bouts of extreme weather. The hellish summer was the latest reminder of how urgently the $333 billion global wine industry is being forced to adapt. Temperature records were set in Europe, the United States, China, North Africa and the Middle East as hail, drought, wildfires and floods on a biblical scale inflicted damage.Grape vines are some of the most weather-sensitive crops, and growers from Australia to Argentina have been struggling to cope. The imperative is particularly great in Europe, which is home to five of the world’s top 10 wine-producing countries and includes 45 percent of the planet’s wine-growing areas.Chêne Bleu is one of the highest vineyards in Provence, France. Winegrowers have been increasingly searching for higher altitudes for cooler temperatures. For many vineyards, new weather patterns are resulting in smaller grapes that produce sweeter wines with a higher alcohol content.A tractor driver loading grapes picked by harvesters. Chêne Bleu is one of the region’s leaders in developing adaptations for cultivation and processing that are regenerative and organic.Mr. Chaudière is the president of an association of wine producers in Ventoux. His winery, Château Pesquié, is in the Rhône Valley, where the impact of climate change over the past 50 years on winegrowers has been significant.The first burst of buds appear 15 days earlier than they did in the early 1970s, according to a recent analysis. Ripening starts 18 days earlier. And harvesting begins in late August instead of mid September. Change was expected, but the accelerating pace has come as a shock.For many vineyards, the new weather patterns are resulting in smaller grapes that produce sweeter wines with a higher alcohol content. These developments, alas, are out of step with consumers who are turning to lighter, fresher tasting wines with more tartness and less alcohol.For other vineyards, the challenges are more profound: Dwindling water supplies threaten their existence.How to respond to these shifts, though, is not necessarily clear.A harvester clipping clusters by hand and dropping them into round baskets, which are then moved into trucks.Emergency irrigation, for example, can save young vines from dying when the heat is scorching. Yet over the long haul, access to water near the surface means the roots may not drill down deep into the earth in search of the subterranean water tables they need to sustain them.Chêne Bleu, a small and relatively new family winery on La Verrière, the site of a medieval priory above the village of Crestet, is one of the region’s leaders in developing adaptations for cultivation and processing that are regenerative and organic.“We’re all going to get whacked by similar weather challenges,” said Nicole Rolet, who inaugurated the winery in 2006 with her husband, Xavier.In her view, there are two responses to climate change: You can fight it with chemicals and artificial additives that battle nature, she said, or “you can create a balanced functioning of the ecology through biodiversity.”Gardeners tending to the fruit and vegetable quarter. Scientists have found that expanding the variety of plants and animals can reduce the impact of shifting climate on crops. Between the rows, grasses blanket the ground. They help manage erosion, retain water, enrich the soil, capture more carbon and control pests and disease.There is a bee colony on the property to increase cross-pollination. The natural approach was on display one morning as harvesters slowly inched down the rows of vines, clipping plump purple clusters of Grenache grapes by hand.Stationary wooden pickets have been replaced by a trellising system that can be adjusted upward as vines grow so that their leaves can be positioned to serve as a natural canopy to shade grapes from a burning sun.Between the rows, grasses blanket the ground. They are just some of the cover crops that have been planted to help manage erosion, retain water, enrich the soil, capture more carbon and control pests and disease.Scientists have found that expanding the variety of plants and animals can reduce the impact of shifting climate on crops, highlighting, as one study put it, “the critical role that human decisions play in building agricultural systems resilient to climate change.”Surrounding Chêne Bleu’s emerald fields are wildflowers, a wide range of plant species and a private forest. There is a bee colony to increase cross-pollination and a grove of bamboo to naturally filter water used in the winery.Sheep provide the manure for fertilizer. The vineyard also dug a muddy pool — nicknamed the “spa” — for roaming wild boar, to lure them away from the juicy grapes with their own water supply.The Rolets have teamed up with university researchers to experiment with cultivation practices. And they are compiling a census of animal and plant species, including installing infrared equipment to capture rare creatures like a genet, a catlike animal with a long, ringed tail.“People are formally and informally doing experimental work, promoting best practices,” Ms. Rolet said, as she sat in a grand dining hall topped by stone archways at the restored priory. “It’s surprisingly hard to do.”“No one has time or money to take nose off the grindstone to look at what someone is doing on the other side of the world,” she explained.Harvesters sifting through grapes on a conveyor belt in the winery, looking to pick out stray leaves or bad grapes.At the winery, the morning’s harvest is emptied onto a conveyor belt, where workers pick out stray leaves or damaged berries before they are dropped into a gentle balloon press. The golden juice drips down into a tray lined with dry ice, producing vaporous swirls and tendrils. The ice prevents bacterial growth and eats up the oxygen that can ruin the flavor.Chêne Bleu has several advantages that many neighboring vineyards don’t. Its 75 acres are relatively isolated and located in a Unsesco biosphere reserve, a designation aimed at conserving biodiversity and promoting sustainable practices. Because it is situated on a limestone outcropping on the ridge of a tectonic plate, the soil contains ancient seabeds and a rich combination of minerals. And, at 1,600 feet, it is one of the highest vineyards in Provence.Winegrowers have been increasingly searching for higher altitudes because of cooler nighttime temperatures and shorter periods of intense heat. In Spain’s Catalonia region, the global wine producer Familia Torres has in recent years planted vineyards at 3,000 to 4,000 feet up.An assistant winemaker. A cellar assistant cleaning equipment.The wine cellar with barrels made of French oaks.Chêne Bleu has other resources. Mr. Rolet, a successful businessman and former chief executive of the London Stock Exchange, has been able to finance the vineyard’s cutting edge equipment and experiments. A larger marketing budget enables the vineyard to take chances others might not want to risk.The Rolets, for example, chose to sometimes bypass traditional appellations — legally defined and protected wine-growing areas — to experiment with more varieties for their high-end offerings.Although the wine map has changed, France’s strict classification system has not. Appellations were instituted decades ago to ensure that buyers knew what they were purchasing. But now, those definitions can limit the type of varieties that farmers can use as they search for vines that can better withstand climate change.Dry ice being added to the press pan to help protect the juice from oxygen. The juice drips down into a tray lined with dry ice, which prevents bacterial growth and eats up the oxygen that can ruin the flavor.“There is a big, frustrating lag time between what the winemakers are experiencing and what the authorities are doing,” said Julien Fauque, the director of Cave de Lumières, a cooperative of roughly 50 winegrowers who farm 450 hectares of land in the Ventoux and Luberon areas.Climate change may mean that growers must reconsider once unthinkable practices.Adding tiny amounts of water could reduce the alcoholic content and prevent fermentation from stalling, he said, but the practice, strictly forbidden across the European Union, could land a winemaker in prison. California, by contrast, allows such additions.There is flexibility in the system, said Anthony Taylor, the director of communications at Gabriel Meffre in Gigondas, one of the larger wineries in southern Rhône. But “they’re on a wire,” he said of official regulators. “They want to preserve as much as possible a profile that is successful, and they’re also listening to the other side, which argues we need to change things or introduce new varieties.”The pace of change, though, is accelerating, Mr. Taylor said: “The speed at which we’re moving is quite frightening.”A chef uses only local products, mainly from the vegetable garden on the estate.Harvesters taking a lunch break before returning to work.Chêne Bleu is on La Verrière, the site of a medieval priory. More

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    U.A.W. Will Not Expand Strikes at G.M., Ford and Stellantis as Talks Progress

    The United Automobile Workers reported improved wage offers from the automakers and a concession from General Motors on workers at battery factories.The United Automobile Workers union said on Friday that it had made progress in its negotiations with Ford Motor, General Motors and Stellantis, the parent of Chrysler, and would not expand the strikes against the companies that began three weeks ago.In an online video, the president of the union, Shawn Fain, said all three companies had significantly improved their offers to the union, including providing bigger raises and offering cost-of-living increases. In what he described as a major breakthrough, Mr. Fain said G.M. was now willing to include workers at its battery factories in the company’s national contract with the U.A.W.G.M. had previously said that it could not include those workers because they are employed by joint ventures between G.M. and battery suppliers.“Here’s the bottom line: We are winning,” said Mr. Fain, wearing a T-shirt that read, “Eat the Rich.” “We are making progress, and we are headed in the right direction.”Mr. Fain said G.M. made the concession on battery plant workers after the union had threatened to strike the company’s factory in Arlington, Texas, where it makes some of its most profitable full-size sport-utility vehicles, including the Cadillac Escalade and the Chevrolet Tahoe. The plant employs 5,300 workers.G.M. has started production at one battery plant in Ohio, and has others under construction in Tennessee and Michigan. Workers at the Ohio plant voted overwhelmingly to be represented by the U.A.W. and have been negotiating a separate contract with the joint venture, Ultium Cells, that G.M. owns with L.G. Energy Solution.Ford is building two joint-venture battery plants in Kentucky and one in Tennessee, and a fourth in Michigan that is wholly owned by Ford. Stellantis has just started building a battery plant in Indiana and is looking for a site for a second.G.M. declined to comment about battery plant workers. “Negotiations remain ongoing, and we will continue to work towards finding solutions to address outstanding issues,” the company said in a statement. “Our goal remains to reach an agreement that rewards our employees and allows G.M. to be successful into the future”Shares of the three companies jumped after Mr. Fain spoke. G.M.’s stock closed up about 2 percent, Stellantis about 3 percent and Ford about 1 percent.The strike began Sept. 15 when workers walked out of three plants in Michigan, Ohio and Missouri, each owned by one of the three companies.The stoppage was later expanded to 38 spare-parts distribution centers owned by G.M. and Stellantis, and then to a Ford plant in Chicago and another G.M. factory in Lansing, Mich. About 25,000 of the 150,000 U.A.W. members employed by the three Michigan automakers were on strike as of Friday morning.“I think this strategy of targeted strikes is working,” said Peter Berg, a professor of employment relations at Michigan State University. “It has the effect of slowly ratcheting up the cost to the companies, and they don’t know necessarily where he’s going to strike next.”Here Are the Locations Where U.A.W. Strikes Are HappeningSee where U.A.W. members are on strike at plants and distribution centers owned by Ford, General Motors and Stellantis.The contract battle has become a national political issue. President Biden visited a picket line near Detroit last month. A day later, former President Donald J. Trump spoke at a nonunion factory north of Detroit and criticized Mr. Biden and leaders of the U.A.W. Other lawmakers and candidates have voiced support for the U.A.W. or criticized the strikes.When negotiations began in July, Mr. Fain initially demanded a 40 percent increase in wages, noting that workers’ pay has not kept up with inflation over the last 15 years and that the chief executives of the three companies have seen pay increases of roughly that magnitude.The automakers, which have made near-record profits over the last 10 years, have all offered increases of slightly more than 20 percent over four years. Company executives have said anything more would threaten their ability to compete with nonunion companies like Tesla and invest in new electric vehicle models and battery factories.The union also wants to end a wage system in which newly hired workers earn just over half the top U.A.W. wage, $32 an hour now, and need to work for eight years to reach the maximum. It is also seeking cost-of-living adjustments if inflation flares, pensions for a greater number of workers, company-paid retirement health care, shorter working hours and the right to strike in response to plant closings.In separate statements, Ford and Stellantis have said they agreed to provide cost-of-living increases, shorten the time it takes for employees to reach the top wage, and several other measures the union has sought.Ford also said it was “open to the possibility of working with the U.A.W. on future battery plants in the U.S.” Its battery plants are still under construction and have not hired any production workers yet.The union is concerned that some of its members will lose their jobs, especially people who work at engine and transmission plants, as the automakers produce more electric cars and trucks. Those vehicles do not need those parts, relying instead on electric motors and batteries.Stellantis’ chief operating officer for North America, Mark Stewart, said the company and the union were “making progress, but there are gaps that still need to be closed.”The union is also pushing the companies to convert temporary workers who now make a top wage of $20 an hour into full-time staff.Striking at only select locations at all three companies is a change from the past, when the U.A.W. typically called for a strike at all locations of one company that the union had chosen as its target. Striking at only a few locations hurts the companies — the idled plants make some of their most profitable models — but limits the economic damage to the broader economies in the affected states.It also could help preserve the union’s $825 million strike fund, from which striking workers are paid while they’re off the job. The union is paying striking workers $500 a week.G.M. said this week that the first two weeks of the strike had cost it $200 million. The three automakers and some of their suppliers have said that they have had to lay off hundreds of workers because the strikes have disrupted the supply and demand for certain parts.Santul Nerkar More

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    Hispanic unemployment rate declines in September

    Among Hispanic workers, the jobless rate decreased to 4.6% from 4.9%.
    Broken down, it dipped to 4.3% from 4.4% among Hispanic women and held steady at 4.3% for Hispanic men.
    The jobless rate among Hispanic workers still lags that of white and Asian workers.

    The U.S. unemployment rate held steady in September but ticked down among Hispanic workers, according to data released Friday by the U.S. Department of Labor.
    September’s nonfarm payrolls report showed a blockbuster month of higher numbers across the board. The economy added 336,000 jobs last month, blowing past the 170,000 estimate from economists polled by Dow Jones. The unemployment rate held steady at 3.8% and came in slightly ahead of a 3.7% forecast.

    Among Hispanic workers, the jobless rate decreased to 4.6% from 4.9%. Broken down, it dipped to 4.3% from 4.4% among Hispanic women and held steady at 4.3% for Hispanic men.
    Meanwhile, the labor force participation rate, which measures the percentage of people working or actively searching for employment in a population, rose to 67.3% from 67.1% in August.

    The combination of a downtick in unemployment and increase in labor force participation is a “best of both worlds” scenario for the group, according to Michelle Holder, associate economics professor at John Jay College in New York.
    “Latinos — with this report — fared pretty well, and job growth in leisure and hospitality could explain part of that,” she said, noting that this population tends to be overrepresented in that sector.
    Elise Gould, a senior economist at The Economic Policy Institute, called the data surrounding Hispanic workers a “mild sign” of an improving labor market, but cautioned reading too much into the month-to-month metrics poised for volatility.

    The jobless rate among Hispanic workers still lags that of white and Asian workers at 3.4% and 2.8%, respectively. However, it does mark a stark difference from the depths of the Covid-19 pandemic when the group experienced the highest unemployment rate, according to Gould.
    “It speaks to the resilience of the labor market,” she said. “Even in the face of rising interest rates, to be able to stay strong, and have it stay strong for so long that you’re really pulling in many historically marginalized groups back into the labor market.”
    However, the jobless rate did tick higher among Black workers, rising to 5.7% from 5.3% in August. Among Black men, the unemployment rate increased to 5.6% from 5%, and fell to 4.5% from 4.7% among Black women.

    Despite these discrepancies, Gould noted that the jobless rate for this group does hover near year-ago levels and remains well below where it stood prior to the pandemic.
    “I always take pause when I see the Black unemployment rate increase, but on the other hand, we’ve seen some volatility in the Black unemployment rate for the last few months,” said Holder.
    Broken down, the labor force participation rate for Hispanic men ticked up to 79.5% from 79.2% in August and held steady at 61.8% among Hispanic women.
    Labor force participation also rose among Black workers, inching up to 62.9% from 62.6% in August. For Black men, labor force participation rose to 68.6% from 68.4%, and slipped to 62.6% from 62.7% among Black women.
    — CNBC’s Gabriel Cortes contributed reporting. More

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    Strong U.S. Job Growth Shows Economy Is Defying Challenges

    Employers added 336,000 jobs in September, almost double what experts had forecast and the biggest gain since January. Markets welcomed the report.In a sign of continued economic stamina, American payrolls grew by 336,000 in September on a seasonally adjusted basis, the Labor Department said on Friday.The increase, almost double what economists had forecast, confirmed the labor market’s vitality and the overall hardiness of an economy facing challenges from a variety of forces.It was the 33rd consecutive month of job growth, and the increase was the biggest since January.The unemployment rate, based on a survey of households, was steady at 3.8 percent. It has been below 4 percent for nearly two years, a stretch not achieved since the late 1960s.Unemployment was unchanged in SeptemberUnemployment rate More

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    Jobs Gains Heat Up Even as the Federal Reserve Looks for Cooling

    Federal Reserve officials are likely to keep a close eye on the job market’s strength in light of September jobs data, which showed that employers hired at an unexpectedly rapid clip.Employers added 336,000 jobs last month, sharply more than the 170,000 economists had predicted. Fed officials have been keeping careful track of the labor market’s strength as they try to assess both how much more they need to raise interest rates to bring inflation under control and how long borrowing costs should stay high.That pace of hiring suggested that the labor market continues to chug along even in the face of the Fed’s 19-month campaign to cool the economy by raising borrowing costs. Central bankers have lifted rates to a range of 5.25 to 5.5 percent, and suggested at their September meeting that they could make one more rate move in 2023 before holding borrowing costs at a high level throughout 2024.The question now is whether policymakers will see the job market resilience as a welcome development — or a concerning one. The Fed’s next meeting is Oct. 31 to Nov. 1, so policymakers will not receive another employment report before they need to make their next rate decision.Fed officials had embraced a recent slowdown in hiring — and that trend now seems far less certain. But the September jobs report did contain some evidence that the economy is simmering down. The data showed that pay grew at only a modest pace in September, for instance.Given that, the strong job gains alone might not be enough to force the Fed to make another rate increase this year. Officials are likely to continue to watch other incoming data — including an inflation report set for release on Oct. 12 — as they contemplate whether borrowing costs need to rise further.Employment data “continues to say it’s a strong labor market, but it is getting a little bit less tight than we saw before,” Loretta J. Mester, the president of the Federal Reserve Bank of Cleveland, said during a CNN International interview on Friday afternoon. Given that wage growth continued to cool, she said the fresh report “doesn’t really change my view that we have a strong labor market and yet — and good — we also see inflation progress.”Economists noted that a few key developments could slow growth this autumn, which could also keep the Fed from reacting too sharply to the fresh hiring figures. Longer term interest rates in financial markets have climbed sharply in recent weeks, for example, and that will make it more expensive for consumers to finance a car or house purchase and for businesses to expand.“In isolation, economic data would probably justify the Fed hiking at the November meeting — what gives me pause for thought is the fact that long-term yields have increased significantly,” said Blerina Uruci, chief U.S. economist at T. Rowe Price. “They will have to weigh how much the recent rise in yields and tightening in financial conditions has done the job for them.”Ms. Mester had previously said that she was in favor of a rate move at the Fed’s upcoming meeting if economic data held up, but added a caveat to that expectation on Friday, in light of the market moves.She said she would make the rate decision “once I get in the room in November — at our next meeting — about whether that’s still true, because there’s other things happening in financial markets.”The jobs report initially made Wall Street wary that the Fed might raise interest rates further, something that would weigh on corporate profits and stock valuations. The S&P 500 slipped just after the report. But stocks rebounded throughout the day — suggesting that investors became less worried as they digested the data, and determined that it suggested economic resilience but not necessarily overheating.Some of that comfort could have come from the news on wages. Average hourly earnings were up 4.2 percent from a year earlier, the mildest increase since June 2021.Unemployment was also in line with what the Fed has been expecting. Officials have continued to predict that unemployment would probably rise slightly as the economy slowed, to about 4.1 percent, which would still be low by historical standards. The rate stood at 3.8 percent as of September, up slightly from 3.4 percent earlier this year.And although September hiring was strong, speed bumps lay ahead for the economy. The recent increase in mortgage rates and other borrowing costs is likely to squeeze growth just as the economy faces other challenges — including the resumption of student loan payments, strikes at car manufacturers and in other industries and dwindling consumer savings piles.“The auto union workers strike will weigh on job growth in October while easing consumer spending and more cautious business activity will lead to slower labor demand,” Gregory Daco, the chief economist at EY-Parthenon, wrote in a note following the report.If officials decide to leave interest rates unchanged at the upcoming meeting, they will have one final opportunity to adjust them this year when they meet on Dec. 12-13.Joe Rennison More

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    Here’s where the jobs are for September 2023 — in one chart

    The strongest sector for job growth in September was leisure and hospitality, according to the Bureau of Labor Statistics.
    Government hiring picked up in September with a net gain of 73,000 jobs.
    The job market has continued to defy expectations of a significant slowdown.

    The U.S. labor market saw broad gains in September in a surprisingly strong jobs report that sparked a quick sell-off in the bond market.
    The strongest sector for job growth in September was leisure and hospitality, according to the Bureau of Labor Statistics. The 96,000 net jobs gain last month was more than the combined total for August and July.

    Bars and restaurants were the strongest group within leisure and hospitality, adding 61,000 jobs.
    Government hiring also picked up in September with a net gain of 73,000 jobs. That is up sharply from the 6,000 jobs added in the same month a year ago.
    State government education accounted for 29,000 of those jobs this year.
    The job market has continued to defy expectations of a significant slowdown, and in fact, the numbers for August and July were revised upward. That could be a sign that more workers are joining the labor market, either through immigration or by coming off the sideline, said Jason Furman, Harvard professor and former National Economic Council director.
    “We’re creating jobs at a clip of nearly 300,000 a month over the last three months. That is way above what you need for the normal replacement rate, but we have seen a higher participation rate. So maybe what we’re seeing here is a labor supply, not labor demand,” Furman said on CNBC’s “Squawk Box.”

    “Some evidence for that is average hourly earnings. It isn’t just the low number this month. Over the last three months, they’ve risen at a 3.4% annual rate. If that continues, that is fully consistent with inflation in the mid-to-low 2s,” Furman added.
    One variable in the monthly jobs report is the labor disputes that are roiling several industries.
    The health-care subsector added 41,000 jobs, down from its 12-month average. The data for the BLS survey was collected in mid-September, so this number does not reflect the Kaiser Permanente strikes.
    On the other hand, the information sector’s job losses were due largely to shrinking employment in motion picture and sound recordings. The BLS said this was largely due to labor disputes, as productions are mostly halted with the Screen Actors Guild still on strike. More

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    Payrolls soared by 336,000 in September, defying expectations for a hiring slowdown

    Nonfarm payrolls increased by 336,000 for the month, better than the Dow Jones consensus estimate for 170,000.
    Average hourly earnings rose 0.2% for the month and 4.2% from a year ago, compared to respective estimates for 0.3% and 4.3%.
    The unemployment rate was 3.8%, compared to the forecast for 3.7%.
    Leisure and hospitality led job growth, followed by government and health care.

    Job growth was stronger than expected in September, a sign that the U.S. economy is hanging tough despite higher interest rates, labor strife and dysfunction in Washington.
    Nonfarm payrolls increased by 336,000 for the month, better than the Dow Jones consensus estimate for 170,000 and more than 100,000 higher than the previous month, the Labor Department said Friday in a much-anticipated report. The unemployment rate was 3.8%, compared to the forecast for 3.7%.

    Stock market futures turned sharply negative following the report and Treasury yields jumped. Dow futures were down more than 250 pints, while the 10-year Treasury yield soared 0.17 percentage point to 4.87%, up around its highest levels since the early days of the financial crisis.
    The payrolls increase was the best monthly number since January.
    “Slowdown? What slowdown? The U.S. labor market continues to exhibit amazing strength, with the number of new jobs created last month nearly twice as large as expected,” said George Mateyo, chief investment officer at Key Private Bank.
    Investors have been on edge lately that a resilient economy could force the Federal Reserve to keep interest rates high and perhaps even hike more as inflation remains elevated.
    Wage increases, however, were softer than expected, with average hourly earnings up 0.2% for the month and 4.2% from a year ago, compared to respective estimates for 0.3% and 4.3%.

    Still, traders in the fed funds futures market increased the odds of a rate increase before the end of the year to about 44%, according to the CME Group’s tracker.
    “Clearly it’s moving up expectations that the Fed is not done,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “All else equal, it probably moves the start point for rate cuts, which has been a moving target, to later in 2024.”
    Sonders said the bond market is “in the driver’s seat” as far as stocks go, a trend that accelerated earlier in the week after the Labor Department reported a jump in job openings for August.
    From a sector perspective, leisure and hospitality led with 96,000 new jobs. Other gainers included government (73,000), health care (41,000) and professional, scientific and technical services (29,000). Motion picture and sound recording jobs fell by 5,000 and are down 45,000 since May amid a labor impasse in Hollywood.
    Service-related industries contributed 234,000 to the total job growth, while goods-producing industries added just 29,000. Average hourly earnings in the leisure and hospitality industry were flat on the month, though up 4.7% from a year ago.
    The private sector payrolls gain of 263,000 was well ahead of a report earlier this week from ADP, which indicated an increase of just 89,000.
    In addition to the powerful September, the previous two months saw substantial upward revisions. August’s gain is now 227,000, up 40,000 from the prior estimate, while July went to 236,000, from 157,000. Combined, the two months were 119,000 higher than previously reported.
    The household survey, used to calculate the unemployment rate, was a bit lighter, rising 215,000.
    The labor force participation rate, or those working against the total size of the workforce, held steady at 62.8%, still a half percentage point below the pre-Covid pandemic level. The rate for those in the 25-to-54 age group also was unchanged at 83.5%. A more encompassing measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons edged down to 7%.
    The September report comes at a critical time for the markets and economy.
    Treasury yields have surged and stocks have slumped amid concern that a still-hot economy could keep Federal Reserve policy tight. The central bank has raised interest rates 5.25 percentage points since March 2022 in an attempt to curb inflation that is still running well ahead of the Fed’s 2% target.
    In recent days, multiple policymakers have said they are still concerned about inflation. They largely have cautioned that while another rate hike before the end of the year is an open question, rates are almost certain to stay at an elevated level for “some time.”
    Though market pricing puts little chance on the Fed hiking again, the higher-for-longer narrative has been causing angst for investors. Higher interest rates raise the cost of capital and run counter to the easy monetary policy that has underpinned Wall Street strength for much of the past 14 years.
    A strong job market is central to the rates equation.
    Policymakers feel that a tight labor picture will continue to put upward pressure on wages which then will push prices higher. Fed officials have said they don’t believe wages played a role in the initial inflation surge in 2021-22, but have become more of a factor lately. More

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    Inflation is ‘always going to be a risk’ with the U.S. economy now fundamentally changed, ADP chief economist says

    ADP’s monthly report on Wednesday showed that private payrolls rose by just 89,000 in September, well below a Dow Jones consensus estimate of 160,000 and down from an upwardly revised 180,000 in August.
    Though jobs reports have been traditionally viewed as a lagging indicator, Richardson noted that the relationship between the labor market and monetary policy has been overhauled in the course of the current cycle.

    A help wanted sign on a storefront in Ocean City, New Jersey, US, on Friday, Aug. 18, 2023. Surveys suggest that despite cooling inflation and jobs gains, Americans remain deeply skeptical of the president’s handling of the post-pandemic economy. Photographer: Al Drago/Bloomberg via Getty Images
    Al Drago | Bloomberg | Getty Images

    Inflation is “always going to be a risk” in the U.S. due to structural changes in the labor market, according to Nela Richardson, chief economist at payroll processing firm ADP.
    Last year, with inflation spiraling out of control across major economies in the aftermath of the Covid-19 pandemic, the U.S. Federal Reserve began a run of interest rates hikes that would take the Fed funds rate target range from 0.25-0.5% in March 2022 to a 22-year high of 5.25-5.5% in July 2023.

    Prior to that, interest rates had remained low for a decade as central banks around the world looked to stimulate their respective economies in the wake of the global financial crisis.
    Speaking to CNBC’s “Squawk Box Europe” on Friday, Richardson said the past 10 years of U.S. economic growth had been driven by low interest rates as policymakers focused on negating recession in the absence of inflationary pressures.
    “This was an economy built on very close to zero interest rates for 10 years of economic expansion, and that was OK because inflation was super low,” she said.

    “But now inflation has awakened, and if you look at demographic trends, labor shortages are not going away. It’s getting better but that’s a structural change in the labor market because of the aging of the U.S. population, so what that means is inflation is always going to be a risk, it’s going to prop up, and so going back to zero or near rock bottom interest rates is going to be difficult to support the economy.”
    Richardson added that the “training wheels have come off” the U.S. economy and that both businesses and consumers are now having to “ride a regular bike.”

    Despite fears of a recession on the back of the Fed’s extraordinary run of monetary policy tightening, the U.S. economy has remained surprisingly robust. The rate-setting Federal Open Market Committee paused its hiking cycle in September and sharply increased its economic growth projections, now forecasting 2.1% growth in GDP this year.
    Meanwhile, inflation is coming back toward the Fed’s 2% target and the labor market tightness that some economists feared was adding to inflationary pressures has shown signs of abating, though unemployment still remains relatively low by historic comparisons.
    ADP’s monthly report on Wednesday showed that private payrolls rose by just 89,000 in September, well below a Dow Jones consensus estimate of 160,000 and down from an upwardly revised 180,000 in August.

    This offered a contrasting signal to a Labor Department report earlier in the week in which job openings posted a surprising jump in August, rising to their highest level since the spring and reversing a recent trend of declines.
    Markets, and Fed policymakers, then turned their attention Friday’s nonfarm payrolls report for further indications as to the health of the U.S. labor market.
    Nonfarm payrolls increased by 336,000 for the month, vastly exceeding a Dow Jones consensus estimate of 170,000 jobs added. The unemployment rate was 3.8%, slightly above the 3.7% consensus estimate.
    Richard Flynn, managing director at Charles Schwab UK, said investors would interpret the jobs report as a sign that there is a “healthy level of demand in the labour market.”
    “Job growth has been a key driver of economic resilience recently, balancing out weaknesses in areas such as housing and consumer goods,” he said in an email Friday.
    “The strong figures released today should help to keep fears of recession at bay and offer optimism for economic sectors that are likely on their way to stability.”
    Though jobs reports have been traditionally viewed as a lagging indicator, ADP’s Richardson noted that the relationship between the labor market and monetary policy has been overhauled in the course of the current cycle.
    “I think there is a feedback loop that is underappreciated. People say the labor market or a good jobs picture is lagging, but the jobs picture is actually feeding current Federal Reserve policy, so it’s not just going in just one direction, there’s a feedback loop in between and these effects can amplify,” she explained.
    “A simple relationship no longer exists. We are in a complex period of the global economy, not just the U.S., and the actions taken by the Fed affect the labor market but vice versa. So we can’t just say ‘oh this is lagging, six to nine months of Fed policy is going to show up in the labor market’ — the labor market is driving Fed policy now.” More