MOLINE, Ill. The Department of Labor’s monthly jobs report is a key measure of the health of the U.S. labor market. On Friday, November 3, the Department of Labor released the latest employment data for October. The U.S. economy added 150,000 jobs last month, below Wall Street’s forecast of an increase of 179,000. The national unemployment rate also rose from 3.8% to 3.9%.
News 8’s Devin Brooks sat down with Quad Cities Investment Group’s Mark Gryczeski to discuss what this means for Americans.
Brooks: What are your thoughts on the latest jobs report?
Gryczeski: This has to be called a pretty disappointing jobs report. As you mentioned, the unemployment rate increased from 3.8% to 3.9%. Last month, the economy added only 150,000 new jobs, well below the expected 179,000. However, job growth in August and September was also revised down by a total of 101,000. As you can see in this chart, we continue to see a steady decline in new job positions added every month. Last year, the economy added an average of almost 400,000 new jobs per month. This year, only about 239,000 new jobs were added each month on average, which is about a 40% decline from last year.
Brooks: Does the latest employment report raise any concerns about the health of the labor market?
Gryczeski: Even though the labor market is gradually weakening, overall it is proving quite resilient.
- The national unemployment rate of 3.9% is not a sign of unrest or a breakdown in the U.S. labor market.
- There are currently 9.6 million unfilled jobs across the country. That’s below the all-time high of 12 million set in March 2022, but still 23% above pre-pandemic levels.
- The annual wage dynamics is currently 4.1%. With inflation at 3.7%, this means that wages are rising faster than consumer prices.
So yes, we are starting to see some cracks in the labor market. However, for now, the labor market is one aspect of the economy that remains quite strong.
As we quickly approach the end of the year, what are Wall Street’s forecasts for the labor market next year?
Gryczeski: Wall Street expects the gradual weakening of the labor market to continue next year, but the outlook is certainly not black and white. The environment must be taken into account. High inflation and high interest rates put a strain on consumers, businesses and ultimately the U.S. economy. And when the economy begins to weaken, that weakness will inevitably be reflected in the labor market. As the economy slows down, the demand for workers naturally declines.
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