In October, nonfarm payrolls in the United States increased by 150,000, falling short of the consensus forecast, which had predicted a rise of 170,000. This marked a significant decline from September when 297,000 jobs were added.
The unemployment rate in the country increased to 3.9%, reaching its highest level since January 2022, amid a decrease in household employment.
Notable job gains in various sectors included healthcare, with 58,000 new jobs, followed by government (51,000), construction (23,000), and social assistance (19,000).
The manufacturing sector, on the other hand, posted a decline primarily due to auto strikes.
Decelerating Job Growth:
The U.S. job market experienced a slowdown in October, aligning with existing expectations for a deceleration in employment growth. This outcome might alleviate some pressure on the Federal Reserve’s efforts to combat inflation.
Nonfarm payrolls increased by 150,000 during the month, as reported by the Labor Department. This figure fell short of the Dow Jones consensus estimate of 170,000 new jobs. The impasse caused by United Auto Workers strikes played a significant role in this discrepancy, resulting in a net loss of jobs in the manufacturing industry.
The unemployment rate also increased to 3.9%, reaching its highest point since January 2022. This was contrary to expectations that it would remain at 3.8%. A drop of 348,000 workers was observed in employment as measured by the household survey, used to calculate the unemployment rate, while the number of unemployed individuals rose by 146,000.
Additionally, a broader jobless rate, which considers discouraged workers and those working part-time due to economic reasons, rose to 7.2%, marking a 0.2 percentage point increase. The labor force participation rate saw a slight decline to 62.7%, and the labor force itself contracted by 201,000.
According to Becky Frankiewicz, Chief Commercial Officer at staffing firm ManpowerGroup, the labor market appears to be cooling off with the arrival of winter. She noted that the fervor for hiring seen post-pandemic and during the summer has waned, and companies are now more inclined to retain their existing employees.
In terms of wage growth, average hourly earnings, a significant factor in inflation, increased by 0.2% for the month, falling short of the forecasted 0.3%. However, the year-over-year gain of 4.1% was 0.1 percentage point above expectations. The average workweek also slightly decreased to 34.3 hours.