The U.S. economy added 150,000 jobs in the month of October, fewer than in average months, according to government data released today. That suggests employers wary of rising labor costs, but there is a silver lining, say CEI experts.
Statement by Ryan Young, CEI Senior Economist:
Job growth slowed in October, but it still grew. With a net 150,000 jobs added, that would annualize to 1.8 million new jobs per year if the rate held steady. That is usually considered tepid, but with unemployment still below 4 percent, it might just be a symptom of near-full employment.
Most of the people who want jobs are still able to find them, though the fact that most of the growth was in government and social services means private sector job growth was weaker, in part due to strikes.
Labor force participation, important but often overlooked, tells a similar full employment story. It held steady at 62.7 percent, which is in the same range as most of the five years or so before the pandemic. The economy has been near full employment for a while now, so a small slowdown in jobs growth is not necessarily a bad omen. Jobs growth might be reaching its limits.
Statement by Sean Higgins, CEI Research Fellow:
The Labor Department’s report Friday that the economy added 150,000 jobs in October, well below the average monthly gain of 258,000 for the year, indicates that employers aren’t searching as hard for new hires and are finding other ways to adapt. That’s partly because the cost of labor keeps rising. Wages rose by seven cents in October and wages are up by 4 percent from last year. An increase in strike activity in the auto sector also partly explains October’s job numbers, even though the actual number of union walkouts was relatively low. The strikes nevertheless remind employers that the cost of labor itself is rising and they need contain that by cutting back.