The unemployment rate rose to 3.7% in October, up from expectations it would hold steady at 3.5%, as the number of jobless Americans rose to 6.1 million, the Bureau of Labor Statistics (BLS) reported Friday.
Labor force participation nudged down 0.1% from September to October, to 62.2%, according to the BLS. Despite employers adding 261,000 jobs overall in October, down from 315,000 in September, the number of unemployed people rose by 306,000, up to 6.1 million, the highest level since February, according to the Federal Reserve Bank of St. Louis.
The unemployment range has hovered between 3.5% to 3.7% since March, and labor force participation has hovered 1.2 percentage points below the pre-pandemic standard set in February 2020, the BLS reported. Monthly job growth has been slowing, with employers adding 372,000 jobs per month in the third quarter of 2022, down from 543,000 in the third quarter of 2021, according to The Wall Street Journal.
2/ We also saw a decline in the prime working age labor force participation rate in October. Not as big as employment but this series also has lower volatility. pic.twitter.com/eU4Z3pmVMI
— Guy Berger (@EconBerger) November 4, 2022
The number of additions blew past investors’ expectations of a more-modest gain of 205,000 jobs, and the unemployment rate surpassed predictions it would hold steady at 3.5%, the WSJ reported. The labor market is anticipated to slow as the Federal Reserve continues to hike interest rates in its bid to combat inflation.
“The broader picture is of an overheated labor market where demand substantially exceeds supply,” Federal Reserve Chair Jerome Powell said in a Wednesday press conference, according to the WSJ. “I don’t see the case for real softening just yet.”
The BLS data contradicts a Wednesday report from payroll firm ADP, which had estimated that the manufacturing sector had cut 20,000 jobs in October. In contrast, the BLS data finds that manufacturers added 32,000 jobs in October, slower than the 37,000 per month average in 2022, but faster than the 30,000 per month seen in 2021.
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