U.S. employers cut hiring in October, adding 150,000 jobs, a modest but still high number and a sign that the labor market may be cooling despite high interest rates. makes borrowing more expensive for businesses and consumers.
Job growth last month, while lower than the 297,000 in September, was strong enough to suggest that many companies want to continue hiring and the economy remains strong.
October employment would have been higher had it not been for the UAW auto union strikes against Detroit manufacturers, a situation now temporarily resolved. The strikes ended this week with tentative agreements in which the companies gave significant wage increases and benefits to unionized workers.
The unemployment rate increased from 3.8% to 3.9% in October. In another sign of a possible slowdown in the labor market, the Commerce Department reduced its estimate of growth in August and September by 101,000 overall.
The UAW strikes led to the loss of 35,000 factory jobs in October. But other sectors saw strong increases, notably health care, with 58,000 new jobs, government agencies with 51,000, and construction companies with 23,000.
Wage pressures eased in October. Average hourly wages rose 0.2% compared to September and 4.2% compared to 12 months earlier. Annual wage increases are the smallest since June 2021; the monthly increase was the lowest since February 2022.
The Federal Reserve examines economic data to determine whether to keep its benchmark interest rate on hold, as it did this week, or raise it again in its campaign to curb inflation. A halt in wage growth and job creation will convince the Fed that inflationary pressures will continue to cool and that further interest rate hikes are unnecessary.
