Topline
Job growth cooled to its lowest level in nearly three years last month, as the Federal Reserve’s high-profile efforts to rightsize the economy yield results, though the unemployment rate remains relatively low in what the U.S.’ top banking official celebrates as a “very welcome result.”
The U.S. added about half as many jobs in October as it did in September.
Key Facts
The U.S. added 150,000 jobs in October, the Bureau of Labor Statistics reported Friday morning, falling short of consensus economist estimates of a 170,000 jump in total employment and coming in far below September’s 336,000 increase.
That’s the lowest number of jobs added since January 2021.
Unemployment rose from 3.8% to 3.9%, well above the 54-year low of 3.4% set earlier this year but still well within the 3.5% to 4.1% range it hovered at in 2018 and 2019 before the pandemic upended the job market.
Average hourly wages rose slightly to $34 last month and are up 4.1% on an annual basis.
Key Background
After unemployment hit an all-time high of 14.7% in April 2020, the labor market exploded as total employment and wages skyrocketed. Unfortunately for Americans’ wallets, the cost of goods and services rose at a steeper pace than wages did as inflation hit its highest rate in 41 years last summer. The Federal Reserve, which operates on a “dual mandate” to achieve maximum employment and price stability, subsequently moved to rein in inflation by increasing interest rates and cooling the broader economy, with a decrease in job and wage growth coming as collateral damage. Inflation has come down—the Fed’s favored core personal consumption expenditure index is down 5.2% to 3.7% year-over-year, though it remains far above the central bank’s 2% target.
Crucial Quote
It’s a “historically unusual and very welcome result” that there’s been “significant progress on inflation without seeing the kind of increase in unemployment that has been very typical of rate-hiking cycles like this one,” Fed chairman Jerome Powell said at a Wednesday press conference.
Further Reading