According to a Friday report released from the Bureau of Labor Statistics, the unemployment rate jumped to 3.7% in October, while payrolls increased by 261,000.
The health-care industry saw the most substantial job growth, followed by professional services and manufacturing. The hotel industry continues to be the worst hit by labor shortages, with employment being significantly below levels recorded at the start of 2020.
For much of the year, the unemployment rate has stayed between 3.5% and 3.7%. The most current numbers show a 0.2% increase above September levels.
“The October employment report appears to be more of a mixed bag than we’ve seen previously,” Bankrate Senior Economic Analyst Mark Hamrick said. “Hiring has lagged behind the strong trends over the last few years. There’s a good chance that the unemployment rate has been at its low point for some time.”
Although payroll figures were better than projected, economists predicted that unemployment would continue at 3.5%. The Dow Jones Industrial Average rose 345 points, or 1.1%, on the news, while the S&P 500 and Nasdaq rose 1.4% and 1.6%, respectively.
The employment data came only days after the Federal Reserve hiked the target federal funds rate by 0.75% for the fourth time in a row, despite officials assuring markets that they will not impose an unduly contractionary monetary regime. Increased borrowing costs for households and companies impede economic activity. The central bank is seeking to cool inflation, which was 8.2% year on year two months ago, according to the Bureau of Labor Statistics statistics.
“The rate of hiring is anticipated to decline considerably during the coming year,” Hamrick warned. “This report will not persuade the Federal Reserve to change its stance on raising interest rates. Before the next policy-setting meeting in mid-December, it has a lot more data to consider, including inflation figures.”
President Joe Biden interpreted the job data, which comes just days before the midterm elections, as evidence that the labor market “remains robust” under his leadership, despite some signals of a hiring slowdown.
“Our biggest economic concern is inflation, and I recognize that American people are feeling pinched. The worldwide inflation that is raging in other nations is now affecting us. I have a plan to reduce prices, particularly for health care, electricity, and other everyday expenses,” the president said in a statement. “We will do all it takes to get inflation down. However, as long as I am president, I will not accept the premise that the problem is that too many Americans are finding decent employment.”
As inflation outpaces wage growth, several economic constraints have lowered living standards. According to polls, those who trust Republicans more than Democrats in managing economic policy are focused on the economy more than any other subject, including contentious social issues like abortion or concerns about the foundation of democracy.