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According to the Bureau of Labor Statistics, the latest U.S. employment report added 261,000 jobs in October, slightly stronger than expected.
“Jobs added to the economy are down from September’s total, but still showing strong positive growth, averaging more than 400,000 jobs per month in 2022,” said Joel Kahn, chief economist at MBA.
The unemployment rate rose 2 basis points to 3.7% in October and the employment rate rose slightly to 62.2%, the second increase in three months.
“Wage growth, as measured by average hourly earnings, fell to 4.73 percent from 4.98 percent in September. This is the slowest rate of growth since August 2021,” Khan said.
“While easing wages may help ease some inflationary pressures, the Fed will continue its current tightening path until widespread evidence shows that inflation is cooling. It is expected to continue.”
Most of the job growth came from health care (+53,000), professional and technical services (+43,000), and manufacturing (+32,000). Meanwhile, construction employment remained largely flat every month due to the decline in the real estate sector.
“Job growth remains strong, but employment is a lagging indicator of the overall health of the economy,” he said. ).
Nathaniel Drake is an analyst in Fannie Mae’s Strategic and Economic Research Group. So while we expect job growth to slow by the end of this year, we don’t expect the economy to lose Internet jobs until next year.
“Stable labor demand remains good news for workers, but given the sharp increase in productivity and the continuing imbalance in labor supply, wage growth will keep inflation above 2% this year.
We believe this is partly responsible for the FOMC’s view that the final federal funds rate should be higher than previously forecast.
Borrowing costs rose further as the Fed raised its benchmark interest rate by another 75 basis points at last week’s meeting. As of Nov. 3, the average 30-year mortgage rate was 6.95 percent.
Reference Source: MPA
