Unemployment Rate Shifts Slightly to 3.9%
Hiring activity slowed in the month of October with the addition of 150,000 new jobs. That figure was roughly half of the prior month, following a downward adjustment that netted out at 297,000. Last month, revisions for the prior two months showed a combined increase of 119,000; the latest two-month revision led to 101,000 fewer jobs than initially reported.
Most sectors recorded little change in October, although job gains were reported in healthcare, government, and social assistance. Reflecting the continued impact of the autoworkers’ strike, the manufacturing sector recorded employment declines.
The unemployment rate saw some slight movement, shifting from 3.8% in September to 3.9% in October.
Following a recent trend toward slowing compensation gains, average hourly earnings mirrored September activity, again rising by 0.2% in October, contributing to a 12-month average increase of 4.1%.
The average work week slowed slightly in October to 34.3 hours.
Temporary Job Trends
In recent months, the temp sector has shown continued contractions, but October activity reversed the trend with the addition of 6,600 new jobs.
What Does It All Mean?
Month after month, economists have predicted a slowing in the labor market, and month after month, their expectations have been thwarted as job growth has remained relatively strong. The November jobs report came closer to predictions, with activity lower than the previous month but still ahead of expectations. With slower job growth and a slower pace of pay increases, many are signaling an easing of the labor supply chain imbalances that have plagued employers for so long.
In an effort to combat inflation, the Federal Reserve has maintained a steady pace of raising interest rates, looking for job growth to slow and unemployment to rise. The latest jobs report may be a signal that the economy is set to deliver on that plan. Not everyone is convinced, however. The slower pace of hiring appears to have invigorated financial markets in the short term, but no single month’s activity is a sure predictor of long-term direction.
Does the prospect of lower job creation bode well for employers? Not necessarily. Although there may be more job candidates available in the labor market, they must be the right candidates to ensure employers can meet their growth goals. There are still 1.5 jobs for every candidate and what seems like an ever-widening skills gap. The challenges of finding, engaging, and retaining talent may be easing somewhat, but employers must continue to bring their “A” game to the field.
Sources: U.S. Bureau of Labor Statistics (BLS), CNBC, CNN, Staffing Industry Analysts, NBC News, Reuters, MSNBC, Daily Caller, The New York Times, FOX Business, The Washington Post, AP News, Bloomberg