Days Before Election, Latest Labor Dept Report Says US Economy Added Quarter-Million Jobs in October
18:23 GMT 04.11.2022 (Updated: 08:57 GMT 15.11.2022)
© AP Photo / Damian Dovarganes
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Republicans have tried to cast US President Joe Biden as a poor manager of the economy, telling voters that his policies are responsible for the country’s financial malaise. While real problems exist and are increasing, official reports have continued to paint a less-than-dire situation.
The US economy added another 261,000 jobs in October, although unemployment also paradoxically rose by 306,000, reaching 3.7%, according to the latest monthly report by the US Bureau of Labor Statistics.
The report found “notable job gains” in healthcare, professional and technical services, and manufacturing sectors.
The report also found that average hourly earnings for private sector workers increased modestly by 0.4%, or just $0.12, and that wages have increased by 4.7% since October 2021. While the October consumer price index report isn’t expected until later in the month, the September report recorded an 8.2% increase in the prices of basic commodities compared to a year ago - twice the increase seen in workers’ pay in that time.
The BLS report comes a day after the Federal Reserve, the United States’ central bank, increased interest rates by 75 base points for the sixth month in a row. The bank has taken an aggressive policy of trying to suppress inflation by discouraging intra-bank lending, although an April study by the Economic Policy Institute found that corporate profits accounted for 54% of inflation in the United States in the last two years.
Increasing interest rates brings with it the risk of recession as well as increasing unemployment. Indeed, both senior Fed members and corporate leaders have said these outcomes are desirable.
The report comes just five days before the 2022 midterm elections, when the races for numerous offices for federal, state, and local legislatures, as well as governorships, will be decided.
It’s common in US politics for the president’s party to lose the midterm elections, and Republicans have campaigned heavily on US President Joe Biden’s shortcomings being reflective of the entire Democratic Party. Many important races are neck-and-neck, leaving the outcome vulnerable to even slight influences, such as a strong jobs report.
"The bottom line here is that the labor market is softening, but has not yet reached the point where the data are screaming at the Fed to stop tightening," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a Friday analysis viewed by AFP.
"But if these trends continue, as we expect, markets will start to push the Fed - and especially Chair Powell - to rethink the idea of continued hikes next year,” he added.
