The Federal Reserve’s aggressive interest rate hikes are beginning to affect the U.S labor market. The nation’s employers keep hiring more people, but at a moderate pace, as unemployment edged higher and wage growth slowed.
That’s according to a Bureau of Labor Statistics (BLS) report released on Friday, showing the U.S economy added 261,000 non-farm jobs in October, ahead of market forecasts but well below the 315,000 jobs added in September and the 407,000 average for 2022. Most of the job gains were in health care (53,000), followed by professional and technical services (43,000), and manufacturing (32,000).
Friday’s jobs report comes a few days after another labor market report by BLS, which shows that job openings for September increased by 437,000 to 10.72 million, up from 10.2 million in August and well ahead of the 10 million that markets had expected.
But solid job openings didn’t have a strong impact on hirings, easing the pace of job gains. The moderation in job gains helped push the October unemployment rate to 3.7%, up from 3.5% in September and above market expectations.
While that may be bad news for Main Street as it makes it harder for people to find jobs, it’s good news for the Fed, which has been trying to cool the labor market to ease wage pressures. Thus, the surge in U.S equities following the report’s release, is a “relief” rally.
But Steven Waudby, Senior Recruiter at Delta Hire, is skeptical about the numbers.
“We have certainly seen a shift in the past few months, but I wouldn’t say that the job market is cooling off,” he told International Business Times in an email. “Despite past predictions that employees still have power in the job market, I believe we are getting closer to being in an employer’s market if we aren’t already there.
“The number of employees voluntarily resigning in search of a job with better company culture and work/life flexibility has inundated the candidate pool with plenty of talented and qualified workers. As a result, employers know they can be more selective when hiring but still need to move quickly to secure the best talent.”
Kari Heyens, VP of Recruiting for Arrive Logistics, advises against “getting too comfortable with this level of growth in the coming month,” she said. “Instead, the onus now will be on employers to refocus efforts on retention, particularly for newer and younger employees.”