The U.S. labor market slowed in October, with nonfarm payroll numbers rising by just 150,000, a significant departure from the robust growth experienced earlier in the year. The Department of Labor’s latest report revealed a downturn from September’s revised figure of 297,000. Additionally, the unemployment rate saw a slight uptick, rising from 3.8% to 3.9%.
Economists, who had anticipated a gain of 170,000 jobs, are digesting the implications of this slowdown. Despite the lower-than-expected growth, some analysts suggest the economy retains its resilience.
Selma Hepp, CoreLogic’s chief economist, emphasizes the enduring strength of the economy despite the tightening of financial conditions. Hepp forecasts a continued moderation in job gains yet expects wage growth to persist due to the mismatch between labor supply and demand.
Healthcare Job Growth Boosts U.S. Employment
The recent labor data also unpacked changes across different sectors. Healthcare, government, and social assistance sectors saw job increases, which propelled the overall employment numbers. However, the manufacturing sector experienced a setback, shedding 35,000 jobs, largely due to the now-resolved United Auto Workers strike.
Moreover, the Federal Reserve’s recent decision to maintain its benchmark interest rate reflects an intent to manage inflation without further rate hikes. Rubeela Farooqi of High-Frequency Economics points to a projected softening in the labor market and a general economic slowdown due to the Fed’s restrictive policy stance.
Wages Rise Slightly Despite Job Slowdown
Despite the deceleration in job growth, there was a modest uptick in wages. Average hourly earnings in October increased by 0.2%, registering a 4.1% rise from the previous year. Wages for nonsupervisory roles saw a consecutive monthly increase of 0.3%. These figures signal a steadily competitive labor market where employers might still feel the pressure to raise wages to attract and retain workers.
Earlier in the year, Coingape media reported a decline in job vacancies, with numbers falling below 10 million for the first time in nearly two years. This trend indicated a softening in the demand for workers, though the labor market overall remained vigorous. Hence, the recent pullback in job growth aligns with a broader movement towards a more balanced employment landscape.
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