According to the employment situation summary released Friday by the U.S. Bureau of Labor Statistics, total nonfarm payroll employment increased by 261,000 last month, but the unemployment rate still increased to 3.7%
What does this mean for Americans?
Per the report, some may be part of the job gains observed in health care, professional and technical services, and manufacturing fields.
Health care jobs rose by around 53,000 last month, including more than 31,000 positions in ambulatory health care services, 11,000 in nursing and residential care facilities and 11,000 in hospitals. Professional services added 43,000 jobs in October and manufacturing added 32,000.
“In October, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents,” or by 0.4%, the same amount that inflation increased in September, said the bureau. During the 12-month period ending in October, average hourly earnings increased by 4.7% and during the 12-month period ending in September, inflation increased by 8.2%
So far this year, monthly job growth has averaged 407,000 compared with 562,000 per month in 2021.
While new jobs were added, the unemployment rate increased by 0.2% last month, meaning that the number of unemployed persons rose by 306,000 to 6.1 million. Unemployment rates have remained in the 3.5% to 3.7% range since March.
Unemployment rates for women and white people rose in October, while other demographics appeared to stay steady. Numbers of permanent job losses and layoffs also changed little last month.
“The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, decreased by 114,000 to 371,000 in October,” said the Bureau of Labor Statistics.
According to Jill Gonzalez, an analyst with WalletHub, more increases in unemployment are likely on the horizon, especially after the Federal Reserve Bank announced a fourth consecutive 75 basis point interest rate hike this week.
“The chances of a sharp rise in unemployment in the U.S. over the coming year are high,” she said. Gonzalez estimates that the unemployment rate will be at 4.4% and 4.8% in 2023 and 2024, respectively. According to CBS News, that means around 1.2 million people will lose their jobs.
“Fed Chair Jerome Powell made that amply clear last week when the central bank projected its benchmark [unemployment] rate hitting 4.4% by the end of the year – even if it causes a recession,” the outlet said Sept. 30.
The Fed raises interest rates in an effort to bring down rising inflation. However, after several rate hikes since March, the most recent BLS report showed that inflation was still high in the U.S.
“Once unemployment does start to rise, the Fed should be able to pull back on its aggressive rate increases,” said Gonzalez.