The United States added 261,000 jobs during October, a sign that the labor market remains solid despite the economic slowdown, according to data published by the Bureau of Statistics (BLS) of the Department of Labor in Washington.
Despite this, the unemployment rate rose from 3.5% to 3.7%, although it remains at historical lows.
The figure of 261,000 jobs is higher than expected by economists, who estimated 193,000, according to the Bloomberg news agency, in the context of an economy experiencing negative prospects and rising interest rates.
Anyway, the indicator showed a slight slowdown compared to the 315,000 jobs added in Septemberand it is the smallest expansion since December 2020.
That the labor market remains robust is a bad omen for the Federal Reserve (FED), which, in its campaign to lower inflation -currently close to 40-year highs-, has reiterated that one of the keys is to reduce pressures in the job.
On Wednesday, by announcing a new rise of 75 percentage points in the reference interest rateFED President Jerome Powell stressed that the labor market “remains unbalanced, with demand substantially exceeding the supply of available workers.”
According to Powell’s reading, the number of job vacancies available (currently 10.7 million) by doubling the number of unemployed generates inflationary pressures either directly by translating into higher wages or indirectly, as it is an indicator that the demand for products and services remains high, and therefore firms need more hires.
According to the employment report, additions in October were widely distributed in the economyespecially in the sectors of health (+53,000 jobs), technical and professional services (+43,000), leisure and accommodation (+35,000), and the manufacturing industry (+32,000).
The average hourly wage -another data followed by the FED-, meanwhile, grew 0.4% monthly (4.7% annually) to US$32.58, behind inflation, which in June was 8 .2% per year.
The decline in purchasing power
The numbers show that the purchasing power of Americans is indeed declining, which is reflected in the latest quarterly data from credit card issuers such as Mastercard and Visa.
Despite the favorable data, the tightening of the Fed’s monetary policy is expected -with the most aggressive rate hike since the 1980s- begin to have an impact in the coming months, hand in hand with the cooling of the economy.
The Fed’s forecasts indicate that unemployment will rise to 4.4% in 2023although Powell stressed that the expectation is that there will be a noticeable drop in the number of vacancies.
So far there have been no large movements in layoffs, concentrated only in the real estate and technology sectors, which are especially vulnerable to rate increases.
“Today’s report shows that the jobs recovery remains strong.”Joe Biden
At the political level, the report is the last one before the mid-term legislative elections.
The US president, Joe Biden, has taken as a manifesto in his campaign the recovery of work in the country after the impact of the pandemic, in the face of questions from the Republican opposition about inflation.
“Today’s report shows that the job recovery remains strong,” Biden said in a White House statement.
The president also stressed that “the unemployment rate among blacks and Hispanics is historically low”and argued that “while the Republicans’ comments seem to encourage a recession, the economy continues to grow and add jobs.”
“I’m going to do everything I can to bring down inflation, but as long as I’m president I’m not going to accept as an argument that the problem is too many Americans looking for good jobs,” Biden added.
