US employers hiring briskly even in face of rate hikes
WASHINGTON, Nov 13, (AP): America’s employers kept hiring vigorously in October, adding 261,000 positions, a sign that as Election Day nears, the economy remains a picture of solid job growth and painful inflation.
Report from the government showed that hiring was brisk across industries last month, though the overall gain declined from 315,000 in September. The unemployment rate rose from a five-decade low of 3.5% to a still-healthy 3.7%.
A strong job market is deepening the challenges the Federal Reserve faces as it raises interest rates at the fastest pace since the 1980s to try to bring inflation down from near a 40-hear high. Steady hiring, solid pay growth and low unemployment have been good for workers. But they have also contributed to rising prices.
“Employers continue to be worried that it’s going to be harder to to hire tomorrow than today, so that actually suggests they don’t see a recession on the horizon,” said Betsey Stevenson, an economist at the University of Michigan who was an economic adviser to President Barack Obama.
Stevenson noted that more than half of last month’s net hiring was in industries – health care, education, restaurants and hotels, for example – that still appear to be catching up from the sharp job losses they endured during the pandemic recession. Hiring in such sectors will likely continue, she suggested, even if the economy slows.
Focused
The October jobs figures were the last major economic report before Election Day, with voters keenly focused on the state of the economy. Chronic inflation is hammering the budgets of many households and has shot to the top of voter concerns in the midterm congressional elections. Republican candidates have attacked Democrats over inflation in their drive to regain control of Congress.
The latest data offered hints that the job market might be cooling, if only gradually, as the Fed is hoping to see. Over the past three months, hiring gains have averaged 289,000, down from a sizzling monthly rate of 539,000 a year ago. Average hourly pay, on average, rose 4.7% from a year ago, a smaller year-over-year gain than in September and down from a 16-year peak of 5.6% in March.
The tick-up in the jobless rate occurred because about 300,000 Americans said they were no longer employed. The unemployment rate is calculated from a separate survey from the jobs figure and can sometimes move in a different direction in the short term.
Still, last month’s wage increase will likely continue to fuel inflation pressures.
“This report was definitely strong enough to keep the Fed on track raising rates,” said Jonathan Pingle, an economist at UBS.
President Joe Biden and congressional Democrats have pointed to the vigorous resurgence in hiring as evidence that their policies have helped get Americans back to work faster than the nation managed to do after previous downturns. But that message has been overtaken in the midterm political campaigns by the crushing surge of inflation, which has soured many Americans on the economy under Democratic leadership in Congress and the White House.