U.S. job growth slowed in September but still beat some economists’ expectations. The U.S. added 263,000 jobs for the month, down from August’s 315,000 nonfarm payroll gain and the lowest monthly gain since April 2021.

But at the same time, unemployment unexpectedly ticked back down to 3.5%, matching a 5-decade low last seen in July. Economists had predicted unemployment would hold steady at August’s rate of 3.7%.

The Bureau of Labor Statistics reported the labor force participation rate was little changed at 62.3% in September, down from 62.4% in August. The bureau said there were notable job gains in leisure and hospitality and in health care.

Monthly job growth has averaged 420,000 so far in 2022, compared with 562,000 per month in 2021, according to government data.

The latest jobs numbers continue to display resilience in the U.S. labor market. It is sure to add more pressure to the Federal Reserve, which is hoping to see signs of a softening labor market in their attempts to slow the economy and bring down inflation, which still hovers near 4-decade highs at 8.3%.

Stocks fell Friday morning as investors digested the latest jobs figures from BLS, knowing this will only give the Fed resolve to remain aggressive in rate hikes. Now, most are anticipating another 75-basis-point increase at the November Federal Open Market Committee meeting. This is the last jobs report the Fed will see before determining how high to raise the federal funds target rate.

The Fed has already raised the fed funds rate multiple times this year, from near zero in March to 3%-3.25% at the September meeting. A one-time 0.75% hike was once seen as outsized and unusual. If the Fed choosing to raise by another 75 basis points in November, it will be its fourth straight hike of that size.

Skyrocketing Fed rates have sent mortgage rates to 16-year highs, with mortgage demand falling to 25-year lows. The average 30-year fixed mortgage rate reached 6.75% this week. Lending is sputtering across all sectors in the U.S. but the Fed has indicated the labor market needs to soften to achieve price stability.