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.”
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