Job growth slips in October, but exceeds expectations, latest BLS data shows

The economy added 261,000 new jobs in October – a slight dip from the month before, but above expectations – indicating strong economic growth, according to the latest jobs report from the Bureau of Labor Statistics (BLS).

October's growth was driven primarily by job gains in health care, professional and technical services and manufacturing. In September, the economy added 263,000 new jobs and 315,000 new jobs were added in August.

The October unemployment rate increased slightly to 3.7%, following the dip in September to 3.5%, according to the Employment Situation Summary.

"The number of jobs added to the economy did slow from September's total, but this was still a strong positive gain that kept the monthly average for 2022 at over 400,000 jobs added per month," Joel Kan, Mortgage Bankers Association (MBA) vice president and deputy chief economist, said in a statement. "Most of the October growth was in the service sector, while the goods producing industries saw the lowest gain since January 2022.  

"The unemployment rate increased slightly to 3.7 percent from 3.5 percent last month, despite a slight decline in labor force participation," Kan continued. "This increase reflects the second time in three months where there has been an uptick in the number of unemployed workers." 

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Labor market must soften more to beat inflation, Fed says 

The Federal Reserve raised interest rates by 75 basis points on Wednesday and said it remained committed to further rate increases in order to bring inflation down to its 2% target. 

There are some signs that the aggressive interest rate increases are starting to work, according to Federal Reserve Chair Jerome Powell. He noted that "the U.S. economy has slowed significantly from last year's rapid pace." However, bringing inflation down to the Fed's target, will likely "require a sustained period of below-trend growth and some softening of labor market conditions," Powell said.

Economists anticipate that rising interest rates and sustained macroeconomic uncertainty will likely result in the softening of the jobs market later this year and into 2023.

"Jobs growth remained robust in October, but there's been a clear downshift in hiring since early 2022," Morning Consult Chief Economist John Leer said on Twitter. "As the economy moved past the bounce-back phase of COVID-19 reopenings, jobs growth was bound to slow.  

"It also looks increasingly unlikely that the U.S. will recover the remaining 1.1 million missing jobs in leisure and hospitality," Leer continued.

Dan North, a senior economist at Allianz Trade, said that the jobs window is closing. 

"Some are wondering how we can be headed for a recession when the economy is still growing (recovering) jobs?" North said. "That's because that's what always happens. Historically, the economy has created jobs right up until the first month of a recession. Then the job losses start coming the next month."

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Seasonal retail hiring slows, NRF data shows

The holiday season is right around the corner but seasonal hiring plans "have fallen dramatically from last year," according to North. 

"Most industries show plans for only half as many hirings this year as last," North said. "Retail, in particular, is forecast to fall from 33% extra last year to only 15% this year."

Retailers are expected to hire between 450,000 and 600,000 seasonal workers, compared to 669,800 seasonal hires in 2021, according to data released on Thursday by the National Retailer Federation (NRF). 

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