https://sputnikglobe.com/20231103/us-job-numbers-down-as-inflation-remains-stubbornly-high-1114703898.html
US Job Numbers Down as Inflation Remains Stubbornly High
US Job Numbers Down as Inflation Remains Stubbornly High
Sputnik International
Job numbers for October were lower than expected, partially due to the Auto-workers strike, but inflation remains high.
2023-11-03T21:37+0000
2023-11-03T21:37+0000
2023-11-03T21:36+0000
economy
federal reserve
central bank
us
interest rates
jobs report
inflation
consumer price index (cpi)
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The US economy added fewer jobs than expected in October and the Bureau of Labor revised its numbers for September and August, lowering the number of jobs created in those months compared to its previous estimates.Nonfarm payrolls were up 150,000 in October, slightly missing the 170,000 that were predicted for the month. Unemployment also rose during October to 3.7%, the highest unemployment rate since January 2022.The United Auto Workers’ union strike has been blamed for the disparity, with the manufacturing sector posting a net loss of 35,000 jobs, 32,000 of those being attributed to the strike.The best-performing sectors were health care, government and construction.A more robust tracker of unemployment, which includes under-employed part-time workers who would like to work more and discouraged workers, puts unemployment at 7.2%.The job numbers in September and August dropped from 336,000 to 297,000 and 227,000 to 165,000, respectively. Combined, there were 101,000 fewer jobs created in those months than previously estimated.There are further signs that the economy is slowing. The gross domestic product (GDP) was a robust 4.9% annualized rate for September, but the Federal Reserve predicts there will only be a 0.7% growth in the fourth quarter of 2023 and a 1% total growth for all of 2024.The Federal Reserve has intentionally been trying to slow the economy in an attempt to fight inflation, which has remained stubbornly high even as it has dropped from its astronomical levels in the post-pandemic economy.In September, the Consumer Price Index (CPI) rose 4.1%, far above the Fed’s goal of 2%. The Fed’s preferred tracker, Core-CPI, which excludes food and energy costs, showed a 3.7% increase in prices. The Fed prefers the Core-CPI metric since volatile energy costs can cause wild swings, making the Core-CPI metric a better indicator of long-term trends.Wages increased only 0.2%, down from 0.3% in September. Combined with the inflation rate in September, that means real wages dropped in that month and will likely show a drop in October. Still, inflation did slow slightly in September compared to August.The Fed, which primarily tackles inflation by raising interest rates, surprised some by declining to raise interest rates in its last two meetings. Market watchers now predict another raise is even less likely following the jobs report.However, some economists disagree. Oliver Rust, head of product at independent inflation data aggregator Truflation, told Sputnik in an email that there may still be an interest rate hike in December.Inflation is also still affecting the American people. “Just because the rate of inflation is stable for now doesn’t mean its weight isn’t increasing every month on family budgets,” Robert Frick, corporate economist with Navy Federal Credit Union, told US media following September’s CPI report. “That shelter and food costs rose particularly is especially painful.”
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us economy, will the fed raise interest rates, jobs report, is the us economy growing
us economy, will the fed raise interest rates, jobs report, is the us economy growing
US Job Numbers Down as Inflation Remains Stubbornly High
Inflation has plagued the US economy since pandemic-era restrictions were lifted, but recent signs show the national economy may be cooling.
The US economy added fewer jobs than expected in October and the Bureau of Labor revised its numbers for September and August, lowering the number of jobs created in those months compared to its previous estimates.
Nonfarm payrolls were up 150,000 in October, slightly missing the 170,000 that were predicted for the month. Unemployment also rose during October to 3.7%, the highest unemployment rate since January 2022.
The United Auto Workers’ union strike has been blamed for the disparity, with the manufacturing sector posting a net loss of 35,000 jobs, 32,000 of those being attributed to the strike.
The best-performing sectors were health care, government and construction.
A more robust tracker of unemployment, which includes under-employed part-time workers who would like to work more and discouraged workers, puts unemployment at 7.2%. The job numbers in September and August dropped from 336,000 to 297,000 and 227,000 to 165,000, respectively. Combined, there were 101,000 fewer jobs created in those months than previously estimated.
1 November 2023, 18:34 GMT
There are further signs that the economy is slowing. The gross domestic product (GDP) was a robust 4.9% annualized rate for September, but the Federal Reserve predicts there will only be a 0.7% growth in the fourth quarter of 2023 and a 1% total growth for all of 2024.
The Federal Reserve has intentionally been trying to slow the economy in an attempt to fight inflation, which has remained stubbornly high even as it has dropped from its astronomical levels in the post-pandemic economy.
In September, the Consumer Price Index (CPI) rose 4.1%, far above the Fed’s goal of 2%. The Fed’s preferred tracker, Core-CPI, which excludes food and energy costs, showed a 3.7% increase in prices. The Fed prefers the Core-CPI metric since volatile energy costs can cause wild swings, making the Core-CPI metric a better indicator of long-term trends.
Wages increased only 0.2%, down from 0.3% in September. Combined with the inflation rate in September, that means real wages dropped in that month and will likely show a drop in October. Still, inflation did slow slightly in September compared to August.
The Fed, which primarily tackles inflation by raising interest rates, surprised some by declining to raise interest rates in its last two meetings. Market watchers now predict another raise is even less likely following the jobs report.
2 November 2023, 20:02 GMT
However, some economists disagree. Oliver Rust, head of product at independent inflation data aggregator Truflation, told Sputnik in an email that there may still be an interest rate hike in December.
“With data still sending mixed signals, the next unemployment release on December 8 will be pivotal, since it precedes the Fed’s last interest rate decision of 2023. If unemployment remains low and the next two inflation readings disappoint on the upside, the Central Bank may see this as sufficient justification for another interest rate hike,” Rust said. “However, policymakers would do well to keep in mind that the full effect of interest rate hikes on the labor market may not come through until 2024.”
Inflation is also still affecting the American people. “Just because the rate of inflation is stable for now doesn’t mean its weight isn’t increasing every month on family budgets,” Robert Frick, corporate economist with Navy Federal Credit Union, told US media following September’s CPI report. “That shelter and food costs rose particularly is especially painful.”
