- The U.S. labor market slowed in October, with employers adding a below-expectations 150,000 jobs, slightly over half of the gain in September.
- The unemployment rate ticked up to 3.9%, the highest in more than a year.
- The report shows the job market getting tougher for workers, just what policymakers at the Federal Reserve have hoped to achieve with their campaign of anti-inflation interest rate hikes.
- The job slowdown could help convince the Fed that it doesn’t need to raise its benchmark interest rate again.
The labor market isn’t quite as hot as it seemed a month ago.
U.S. employers added 150,000 jobs in October, the Bureau of Labor Statistics said Friday, the lowest since June and slightly over half the 297,000 added in September. It was also fewer than the 170,000 expected according to a poll of forecasters by Dow Jones Newswires and the Wall Street Journal. What’s more, the bureau downwardly revised reports from August and July, reducing those job gains by a total of 101,000.
The unemployment rate rose a tick to 3.9%, its highest since January 2022 although still low by historic standards. Hourly earnings only rose 0.2%, the smallest increase since February 2022.
The statistics partly reflect the impact of the United Autoworkers strike, which took some 40,000 workers off the job, showing up in the report as a decrease of 35,000 workers in the manufacturing sector. The slowdown in hiring is also a sign that the Federal Reserve’s campaign of anti-inflation interest rate hikes that began in March 2022 may be taking more of a toll on the economy as time goes on.
The report shows the labor market getting tougher for workers, but could be well received by Fed Chair Jerome Powell and the other decision-makers at the central bank that the economy, and inflation, are cooling off without the need for any more hikes to the fed funds rate, economists said.
“The U.S. labor market cooled further in October, just as Dr. Powell prescribes,” Sal Guatieri, senior economist at BMO Capital Markets, wrote in a commentary. “This is a very Fed-friendly report, with job growth slowing, the jobless rate rising, and wages cooling.”
Stocks rose and bond yields fell on Friday morning in response to the latest jobs numbers, as market participants are hopeful that the Fed may not have to tighten monetary policy further.
Update—This article has been updated after publication to add interactive graphics.