Hiring growth slowed in October
U.S. employers added 150,000 jobs last month
WASHINGTON — The nation’s employers slowed their hiring in October, adding a modest but still decent 150,000 jobs, a sign that the labor market may be cooling but remains resilient despite high interest rates that have made borrowing much costlier for companies and consumers.
Last month’s job growth, though down sharply from a robust 297,000 gain in September, was solid enough to suggest that many companies still want to hire and that the economy remains sturdy. And job growth would have been higher in October if not for the now-settled United Auto Workers’ strikes. The strikes ended this week with tentative settlements in which Detroit’s automakers granted significantly better pay and benefits to the union’s workers.
Friday’s jobs report from the government comes as the Federal Reserve is assessing incoming economic data to determine whether to leave its key interest rate unchanged, as it did this week, or to raise it again in its drive to curb inflation. The lower job growth in October, along with a slowdown in pay gains last month, could help convince the Fed that inflation pressures will continue to cool and that further rate hikes may not be needed.
On Wall Street, traders appeared to signal their growing belief in that scenario. Bond yields fell and stock prices rose sharply after the jobs report was released, indicating optimism that the Fed will decide it won’t need to impose additional rate hikes.
The unemployment rate rose last month from 3.8% to 3.9%. And in another sign of a possible softening in the labor market, the Labor Department revised down its estimate of job growth in August and September by a combined 101,000.
The UAW strikes contributed to an overall loss of 35,000 factory positions in October. Several other sectors posted solid job gains last month, notably health care, which added 58,000, government agencies 51,000 and construction companies 23,000.
By contrast, the vast leisure and hospitality sector, which includes bars, restaurants and hotels, reported only modest job growth. So did professional and business services, a category that includes such high-paying occupations as accounting, engineering and architecture.
Wage pressures, which have been gradually slowing, eased further in October. Average hourly pay rose 0.2% from September and 4.1% from 12 months earlier.
The Fed has raised its benchmark interest rate 11 times since March 2022 to try to slow the economy and tame inflation, which hit a four-decade high last year but has slowed sharply since then. In September, consumer prices rose 3.7% from a year earlier, down drastically from a year-over-year peak of 9.1% in June 2022 but still well above the Fed’s 2% target level.
The U.S. job market has remained on firm footing despite those rate hikes and has helped fuel consumer spending, the primary driver of the economy. Employers have now added a healthy 204,000 jobs a month over the past three months. The combination of a solid economy and decelerating inflation has raised hopes that the Fed can nail a so-called soft landing — raising rates just enough to tame inflation without triggering a recession.