November’s jobs report, released Friday morning, will provide an update on the job market heading into 2024, with economists expecting 190,000 new jobs, up from 150,000 in October. are doing. Economists expect the unemployment rate to remain at 3.9%, but are keeping an eye on whether it will rise.
“Unemployment rates have been rising in recent months, but the question is whether this trend will continue,” said Nick Bunker, director of economic research at job site Indeed. He added that there is a possibility.
The unemployment rate fell in April to its lowest level since the late 1960s, but has risen half a percentage point since then, with about 849,000 more workers reporting they are unemployed. Economists say this weakness is likely due to a variety of reasons, and there is no need to worry about a broader recession at this point. More workers are entering or re-entering the labor market. There has also been a recent spate of strikes, particularly in the auto manufacturing and entertainment industries, which, although eventually resolved, have created some leeway in the labor market.
Part of this slowdown appears to be a reaction to the Federal Reserve’s interest rate hikes. The central bank, which has raised interest rates to 22-year highs to curb inflation, has so far delivered wage growth of 3.2% a year, enough to ease labor market demand and rein in inflation. We have achieved our goal of achieving this goal. There have been no catastrophic job losses so far in October. Economists caution that it is still too early to determine the full impact of the rate hike.
Investors are also optimistic that a softening labor market will be enough to prevent the Fed from raising interest rates again, fueling enthusiasm in financial markets. Friday’s jobs report will provide one of the last snapshots of the labor market ahead of the Fed’s Dec. 12 and 13 meetings to consider interest rate policy aimed at curbing inflation. become.
By most measures, the labor market remains as strong or stronger than in the years leading up to the pandemic, a period marked by low unemployment and solid employment growth. The unemployment rate for Americans has been below 4% for almost two years, and the labor market remains unusually favorable to workers, as workers demand raises and move on to better jobs. It shows that it has an influence. The number of layoffs also remained low in October, despite concentrated job losses in parts of finance, technology and media, according to the Labor Department’s job survey released Tuesday.
“The current state of the labor market is good,” Bunker said. “For more than a year now we have been talking about normalizing the labor market. We are at the point where that process is complete. This is a normal labor market. Things are calming down in a painless way. I did.”
Meanwhile, the number of job openings has fallen sharply from a peak of 12 million in March 2022 to 8.7 million in October, according to Tuesday’s report, with employers no longer recruiting feverishly. It shows that it is not. Low layoff rates and reductions in hours since the beginning of this year are a sign that employers are acting cautiously to retain workers despite subdued demand after years of competition for labor. It is an expression.
“Employers are no longer willing to turn a blind eye and pay for labor,” said Drew Matas, chief market strategist at MetLife Investment Management. “But they’re paying attention to who needs what. And they’re thinking, what if everything is much better and I’m short staffed? Part of that is the coronavirus I have a hangover from my experience.”
While the overall outlook remains rosy, economists note that some key sectors, such as health care and education, are fueling the labor market. The government has struggled to attract and retain workers since the pandemic, but wages finally returned to pre-pandemic levels in October as wage growth caught up with the private sector. In recent months, employment growth in industries such as retail, transportation, warehousing, leisure and hospitality has been slower and more inconsistent.
The good news for workers is that while wage growth has slowed since the beginning of this year, rising 4.1% in the past 12 months in October, inflation has slowed further, meaning average hourly wages are outpacing inflation. This is boosting the purchasing power of Americans.
“This is encouraging for central bankers and for the public who are getting real wage increases,” Bunker said. “People are spending more, GDP is growing and it’s good for everyone. It’s a win-win for different audiences.”