The Bureau of Labor Statistics' employment report showed that the labor market is weakening. The unemployment rate reached 3.9% in October, the highest since January 2022.
Employment growth also slowed more than expected, with 150,000 jobs added compared to the 180,000 projected. This data also marks a significant difference with that of September, when 297,000 jobs were added. According to Lydia Boussour, chief economist at Ernst & Young:
The October jobs report will likely show a marked softening in labor market conditions with private-sector hiring moderating and wage growth cooling further ... Looking ahead, we foresee softer labor market conditions with further hiring freezes and strategic resizing decisions along with some continued moderation in nominal wage growth.
150,000 new jobs
The report states that the 150,000 new jobs occurred were mostly in the areas of "health care, government, and social assistance." It attributes the decrease in employment in the manufacturing sector to the strikes carried out recently, notably in the automotive sector:
Health care added 58,000 jobs in October ... Employment in government increased by 51,000 in October ... Social assistance added 19,000 jobs in October ... Employment in manufacturing decreased by 35,000 in October, reflecting a decline of 33,000 in motor vehicles and parts that was largely due to strike activity.
Interest rates
The employment data is released a week after the Federal Reserve (Fed) revealed that it would keep interest rates stable after they had been on a constant rise. However, Jerome Powell, president of the Fed, warned that the plans to reduce inflation have "a long way to go," not ruling out potential new rate increases.
