Economy is averaging 400,000 jobs a month this year. Employers added 261,000 jobs during the month of October. This exceeded employment growth expectations. The labor market is rather tight and we are experiencing higher interest rates (with an economic slow down). The unemployment rate did climb to 3.7%.
Many of these new jobs are in healthcare, tech services, and manufacturing. The job growth is slow and steady and workers are successfully navigating difficulties. The Federal Reserve this week reiterated its desire to see employers cut down on hires to alleviate some pressures of rising wages (and in attempt to bring interest rates down from the current 8.2% to the goal of around 2%). Jerome Powell says the labor market is "out of balance" and doesn't think this 2% interest rate can really happen.
Labor statistics and unemployment are playing a role in the battle with inflation in today's economy so it is important to pay attention to them. Since there is decreased labor force participation, the higher wages are increasing consumer spending and increasing inflation which is causing interest rates to continue rising. The overall jobs added in 2022 per month was ~407,000 which is less than 2021's average of 562,000 a month.
There is somewhat of a battle going on between the tight labor force and those who are attempting to slow down demand for workers to ease inflation. Powell says that it is premature to establish or discuss rate changes. It is believed that some businesses may be reluctant to lay off workers as activity decreases because hiring is so difficult after covid. When workers are harder to hire, companies are more reluctant to laying them off.
https://www.usnews.com/news/economy/articles/2022-11-04/employers-added-261-000-jobs-in-october-beating-estimates
When looking at the article, I found that layoffs are beginning to mount in the tech and housing sector, probably meaning that these industries as really feeling the news of the economy with inflation and the rising interest rates.
ReplyDeleteHello Sophie,
ReplyDeleteRight now the Federal Reserve is doing all they can do to lower the current inflation rates of 8.2%. They efforts include raising interest rates as we have already seen a large increase in the last 2 months and expect it to take another hike in December, and for a longer period of time. However, I don't see how we can achieve our target of 2% inflation at the rate that we are going. It will take time, maybe even a year before we get close to reaching that target goal that Jerome Powell set in place. It is important to note that the UR is still at a very consistent and healthy level as employers are still looking to add jobs. Employers have been encouraging work by raising wages and or giving people a sign on bonus when they apply and are accepted. As large amounts of labor increases then wages will slowly see an increase but as of now due to how tight the labor is we can expect wages to stay rather flat with some flexibility in the near future. Overall, good job!!!
we see as the work force participation rate being down after covid tightened the labor markets and brought unemployment rates down. Raising wages has been good for employees as there is more job openings than there is people unemployed. It is not a matter of if there are jobs avaible it is a matter of people finding the right work.
ReplyDeleteI think it is important that you talked a lot about employers adding 261,000 jobs during the month of October. This is important to note because with this increase in jobs over the month of October, hopefully we will see a decrease in wages, which will then lead to a decreased inflation rate. As a senior closing in on my entrance into the labor markets, this post was very intriguing.
ReplyDeleteOverall, great post! I think it will be interesting to see how we are affected as some of us begin to enter the workforce. What types of jobs will be available then?
ReplyDelete