US Economy Adds 261k Jobs in October
Exceeding the approximate 200k jobs predicted by economists, the US Labor Dept. on Friday announced that the US economy added 261k jobs in October, though the unemployment rate jumped from 3.5% in September to 3.7% last month.
Facts
- Exceeding the approximate 200k jobs predicted by economists, the US Labor Dept. on Friday announced that the US economy added 261k jobs in October, though the unemployment rate jumped from 3.5% in September to 3.7% last month.
- The average monthly growth rate of 289k over the last three months is lower than the average of 539k during the same period the previous year but higher than the pre-pandemic average of 164k per month in 2019.
- ADP, the US's largest payroll processing firm, reported Wednesday that private employers added 239k jobs, up from 192k in September. However, it noted that job growth wasn't widespread, with the leisure and hospitality sector accounting for 210k jobs created.
- Average hourly earnings also continued to rise in October, climbing 0.4% from September and 4.7% on the year, though slightly down from 5% on the year in September. Despite this, pay increases are reportedly not keeping pace with inflation, which rose 8.2% on the year through September.
- Friday's report showed a sharp decline in hiring for industries directedly affected by the Federal Reserve's (Fed) interest rates, with construction dropping from 22k in September to 1k in October. Warehousing and transportation job growth have also flatlined as consumers shift their spending from goods to services.
- In October, unemployment reportedly rose mostly for adult women and white Americans while flatlining for other racial groups and adult men. The news comes as Democrats worry that the softening labor market could hurt them in the Nov. 8 midterms. A recent Gallup poll showed 49% of Americans believe the economy is an "extremely important" issue.
Sources: CBS, Wall Street Journal, Guardian, New York Times, and Newsweek.
Narratives
- Democratic narrative, as provided by Washington Post. Though it may seem counterintuitive, the slowdown in job growth from last year — while the market remains strong — means the Fed's interest rates are working. Though the economic recovery is slow, it's heading in the right direction under Biden's leadership, and Republicans don't seem to have any plausible alternatives if they were to win the midterms.
- Republican narrative, as provided by Washington Examiner. While this report may seem optimistic on the surface, the reality is far from this: slowing job growth, combined with record inflation and rising unemployment, signals that a Biden-induced recession is on the horizon. The so-called "positives" of this job report won't be enough to carry Democrats through the final stretch of the campaign trail.
Predictions
Will the US enter a recession before the following dates?
The aggregate of Metaculus community forecasters was on Nov 07, 2022.
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