US Job Growth Slows, Unemployment Rate Surges in October: Report

In October, the job market in the United States saw a notable slowdown in hiring, with approximately 150,000 jobs added, as economic uncertainties and rising interest rates increased borrowing costs for both businesses and consumers. According to a Labor Department report, this figure was a significant drop from the robust 297,000 jobs added in September but still indicates a strong economy with many companies continuing to hire.

Economists pointed out that the impact of the United Auto Workers strike across the country resulted in a decrease of at least 30,000 jobs in the growth numbers. The strike concluded with tentative agreements that included improved pay and benefits for the union’s workers.

As a result, the unemployment rate increased from 3.8 percent to 3.9 percent in October. The Federal Reserve’s 11 interest rate hikes since March 2022 aimed to contain inflation at 2 percent, while also affecting the pace of economic growth.

The steady job market has contributed to increased consumer spending, which is a significant driver of the economy. Employers added an average of 225,000 jobs per month over the last three months. This job report arrives at a time when the Federal Reserve is evaluating economic data to decide on further interest rate adjustments to control inflation.

In September, consumer prices rose by 3.7 percent year-over-year, slightly below the peak of 9.1 percent in June 2022 but still above the Fed’s 2 percent target. The Fed closely monitors monthly job data to gauge employment trends and wage growth, which can impact inflation. Their objective is to balance interest rates to manage inflation, support job growth, and prevent a recession.

Despite concerns of a recession triggered by the Fed’s extended rate hikes over 22 months, the largest economy in the world, the United States, has shown resilience and durability. ABC reported that the persistent increase in wages for both existing and new hires can contribute to inflation, and wage gains need to align with the central bank’s inflation target.