In October, there was a slowdown in job growth in the United States, as reported by government data released on Friday. This deceleration was, in part, attributed to a strike by auto workers.
The largest economy in the world added 150,000 jobs last month, falling short of analysts’ expectations and down from the revised figure of 297,000 in September, as reported by the Labor Department. The report also noted a slight increase in the unemployment rate, bringing it to 3.9 percent.
From a policymaker’s perspective, this development is likely to be viewed positively, as there were concerns that an excessively strong labor market could sustain elevated inflation. Over the past year, the job market has shown unexpected resilience, even as the central bank raised interest rates rapidly to combat inflation. Such rate hikes typically result in a slowdown in hiring and a rise in unemployment.
However, the strong growth in jobs and wages has enabled consumers to continue spending, even as inflation has decreased, thus supporting economic growth. This has raised optimism that the United States may avoid a recession despite the presence of higher interest rates.
Labor Department data for October showed that average hourly earnings inched up by 0.2 percent, a slight decrease from the previous month. The department explained, “Employment in the manufacturing sector declined by 35,000 in October, primarily due to a drop of 33,000 in motor vehicles and parts, largely stemming from strike activity.”