The Bureau of Labor Statistics’ October Employment Situation Report finds that the U.S. economy added 150,000 in October, while the unemployment rate rose to 3.9%. Paired with revisions to last month’s numbers, the report shows that the labor market is cooling slightly, right on cue.
The U.S. economy added 150,000 jobs in October, while the unemployment rate rose to 3.9%. Paired with revisions to last month’s numbers, the report shows that the labor market is cooling slightly, according to an analysis from Andrew Flowers, lead labor economist at Appcast and research director at Recruitonomics.com.
This may be due to a striking decline in manufacturing, as labor action in the motor vehicle and parts manufacturing subsector caused a decline of 33,000 jobs last month. Though striking workers are not counted as unemployed, the strikes against manufacturers last month made a dent in employment growth in the sector.
Job growth in October was cooler than market expectations, Flowers said. After an uptick in employment growth in September, which was revised down by 39,000 in the report, this growth aligns more with the Federal Reserve’s hopes for the labor market — not nearly recessionary, but less strong than the rates seen in 2021 and 2022.
The unemployment rate ticked up to 3.9%, which is historically low and continues a streak of below 4% unemployment that’s going on its 23rd month. The labor market remains tight, even as it cools, according to Flowers.
Both the prime-age labor force participation rate and the employment population ratio dipped slightly from the previous month, to 83.3% and 80.6%, respectively.
Average hourly earnings for private sector non-managers continue to moderate over the last three and 12 months down to 3.5% and 4.4% annual rates, respectively. October’s monthly reading was listed at 4.2%, but the broader trends should assuage fears of inflation picking back up after a period of cooling, the likes we saw in the summer of 2022.
As for industry-level employment trends, manufacturing has been weighed down by the UAW strike, which caused a decline of 33,000 jobs. Still, healthcare is doing strong, while leisure and hospitality had a weak month, Flowers says.
