The latest employment figures from the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) reported that total nonfarm payroll employment increased by 263,000 in September, lowering the unemployment rate from 3.7 percent to 3.5 percent, the same number as July.

Labor participation remained roughly the same, at 62.3 percent, the level at which it has remined mostly consistent throughout 2022. That number is only slightly less than the 63.4 percent of participation that was recorded in February 2020, before the onset of the COVID-19 pandemic and the havoc it wrought on the economy.

“Lack of child care is a significant reason workers are staying out of the labor market,” the Wall Street Journal reported.

The Journal also cited numbers in the report that suggest that the labor market is starting to cool.

“Employers’ total job openings fell 10 percent in August to a seasonally adjusted 10.1 million from 11.2 million the month before,” according to the BLS.

Despite that cooling, “we have a long way to go towards restoring balance between supply and demand for labor,” Sarah House, senior economist at Wells Fargo, told the Journal. 

Today’s figures “will keep the Federal Reserve on track to approve another large interest-rate increase at its meeting next month as officials seek to lift borrowing costs high enough to soften the labor market and ease inflation pressures,” the Journal added.

In a speech at the University of Kentucky, Governor Christopher Waller said that the Fed needs to keep raising interest rates into early next year to bring down stubbornly high inflation, in prepared remarks obtained by Reuters.

"Inflation is far from the FOMC (Federal Open Market Committee)’s goal and not likely to fall quickly," he said. "This is not the inflation outcome I am looking for to support a slower pace of rate hikes or a lower terminal policy rate" than that projected by policymakers last month.