WASHINGTON—For most Americans, Friday’s September jobs report was welcome news: Businesses kept hiring at a brisk pace, unemployment fell back to a half-century low and average pay rose.
Yet for the Federal Reserve, the jobs figures highlight how little progress they’re making in their fight against inflation. With the Fed more likely to keep raising borrowing costs rapidly, the risk of recession will also rise.
Employers did pull back slightly on hiring last month, and average wage gains slowed. But economists say neither is falling fast enough for the Fed to slow its inflation-fighting efforts.
As a result, another hefty rate hike of three-quarters of a point—a fourth consecutive one—is likely at the Fed’s next meeting in November. (The central bank typically lifts rates in quarter-point increments.)…