The US economy added 150,000 jobs last month. Here’s what that means
Nov 3, 2023, 6:49 AM | Updated: 8:50 am
(Andrew Caballero-Reynolds/AFP/Getty Images)
Minneapolis (CNN) — The US economy added 150,000 jobs last month, falling below expectations but still notching a solid month of employment growth, according to Bureau of Labor Statistics data released Friday.
October’s job growth came in below September’s stronger-than expected but downwardly revised total of 297,000 jobs.
The unemployment rate ticked higher to 3.9%, its highest level since January 2022.
Economists were expecting net job gains of 180,000 for the month and for the unemployment rate to hold steady at 3.8%, according to Refinitiv.
Last month’s job gains are the lowest since June, but there is a caveat: The October total reflects a 35,000-job decline in the manufacturing sector, specifically 33,200 jobs lost in the motor vehicles and parts industry. Those declines were largely attributed to strike activity.
The United Auto Workers union went on strike in mid-September against Ford, General Motors and Stellantis. At the end of October, the UAW reached tentative agreements with the Big Three automakers to end the labor strikes.
What this means for the Fed
The resiliency of the labor market has helped to keep consumer spending strong and the economy churning, but Federal Reserve officials are hoping for more of a slowdown in order to help rein in inflation.
“The October jobs report provides plenty of evidence that labor market conditions are softening and will allow the Fed to keep policy on hold as it monitors its progress toward returning inflation to 2%,” Nancy Vanden Houten, lead US economist for Oxford Economics, wrote in a note Friday.
Fed Chair Jerome Powell said Wednesday in a news conference that the labor market has been moving into “better balance,” but that it’s likely there still needs to be slower growth on the jobs front to fully achieve price stability.
Job growth has slowed tremendously from its breakneck pace in 2021 and 2022, when monthly gains averaged 605,000 and nearly 400,000, respectively. Including the estimated 150,000 jobs added last month and the downward revisions to August and September that totaled 101,000 jobs, the United States is averaging 239,000 jobs gained per month so far this year.
Fed officials are closely watching wage growth. In October, average hourly earnings ticked up by 0.2%, a slightly slower pace than the month before. On an annual basis, that measurement of pay growth is up 4.1%, the slowest growth seen since the middle of 2021.
The impact of striking workers
Because of the timing of the striking actions and how the BLS tracks such activity, October is the first jobs report that reflects the massive strike.
In October, the BLS tabulated that there were 48,100 workers on strike. That’s the highest monthly since February 2004, when 72,000 Southern California grocery workers went on strike.
“With the strike now settled, employment in the industry should bounce back in November,” said Gus Faucher, chief economist with PNC Financial Services.
Aside from the significant — but likely temporary — losses registered in manufacturing, most industries recorded job gains last month, with the largest increase (77,200 jobs) occurring in the health care and social assistance sector.
This story is developing and will be updated.
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