According to the October jobs report also known as the Employment Situation Summary, released by the U.S. Bureau of Labor Statistics (BLS) for October, 150,000 jobs were added to the United States economy by employers from different sectors. It is below the expectations of 170,000 jobs that economists forecasted for October.
The good news is that the healthcare sector has remained strong under President Joe Biden, this is as the sector added 58,000 new jobs. The bad news is that the government once again continues to remain one of the largest employers of labor. The government sector increased by 51,000 jobs.
What is The US Jobs report?
The jobs report which is usually released on the first Friday of every month is based on surveys of households and employers. It usually estimates the number of people on payrolls in the United States economy, the average number of hours they worked weekly, as well as their average hourly earnings.
The jobs report provides estimates by state and metropolitan area, and by industry. The report also tallies the hours worked and earnings of production and non-supervisory employees.
What are Economists Saying?
Economists believe that this wide fall in new jobs from the earlier forecast of 170,000 to 150,000 jobs goes hand in hand with the United Auto Workers strikes and it is primarily responsible for the net loss of jobs in the manufacturing industry as well.
A school of thought on this matter suggests that the job fall is a good thing as it indicates a cooling of the economy laced with traces of inflation that for some time now has been constantly felt by all Americans. Some economic experts say this jobs report indicates that the economy is beginning to show signs of the soft landing that the Federal Reserve has been hoping to achieve.
Summary of the October Jobs Report
The United States unemployment rate has maintained a steady rise, this time to 3.9%, which is the highest level since January 2022. The United States payroll Rose by 150,000 new jobs and the sectors that were impacted mostly are;
- Government +51,000
- Social Assistance +19,000
- Construction +23,000
- Manufacturing -35,000
- Healthcare +58,000
- Transportation -12,000
- Business services +15,000
- Leisure and Hospitality +19,000
How will the Fed react to the October jobs report?
There are speculations all across the country that more jobs at a time like this might mean Americans are taking more than one job.
October job gains indicate that the U.S. economy is staying strong despite higher interest rates which might make the Federal Reserve raise interest rates this month. Investors are still warning that the Fed’s hiking rate again could harm the economy because though these job numbers are positive, there’s still reason to worry that the Fed’s actions including any rate hikes in October could harm the labor market.
How Investors are reacting
The average hourly earnings in the October jobs report indicate an increase of 0.2%, which is less than the 0.3% earlier forecasted, while the average work week went slightly lower to 34.3 hours. With this news, stocks started to react in red immediately after the report. However, the Dow later rose by higher points just before the close of trading adding 100 points. Investors are still trying to observe if the Federal Reserve will start hiking rates again later this month.
