October Jobs Report: Hiring Cools as Labor Market Loosens

The Bureau of Labor Statistics on Friday reported the U.S. economy added 150,000 jobs in October. The number is more in line with previous cooling prior to September’s massive reported 336,000 job gains.

The job growth occurred largely in the healthcare (58,000 jobs), government (51,000), and social assistance (19,000) sectors.

“This should give companies slightly more comfort knowing that the chance that the Federal Reserve has to hike rates again decreases with more jobs reports like this,” said Lawrence Dearth, President of Recruiting at Insight Global.

Job and Wage Growth Slows

The 150,000 jobs added in October is the second lowest number of the year—and more in line with three-month averages at the end of 2019 before the COVID-19 pandemic, when the job market was viewed as more stable.

Economists had predicted between 170,000 to 180,000 jobs would be added. Experts say the lower overall jobs number can be attributed, in part, to labor strikes occurring during the month.

Wages also increased just 0.2 percent in October—the same as September and generally slower growth than previous months.

“Where we saw our highest rates of wage inflation—primarily in healthcare and high-end IT—is where we are now seeing significant deceleration if not year-over-year decreases in wages as the economy normalizes,” Dearth said.

There Are More Job Seekers Per Job Opening

On top of wage growth slowing, Dearth says that he’s been seeing more job seekers per job opening.

This comes as the number of total job openings has trended downward for the last 18 months, while there are also more people looking for work—especially the increasing number of unemployed people.

As a job seeker, Dearth says there are a couple of things to do in a market like this to try and stand out:

  • Be willing to work on site, especially if you’re looking for a role that increasingly became more remote during the COVID-19 pandemic. (Businesses are valuing workers who are willing to come on site in at least a hybrid scenario, and most new job openings—even in tech—are for non-remote roles.)
  • Stay aggressive in your job hunt.
  • Don’t write off a great fit solely because of wages, especially if overall wage trends aren’t matching expectations from 2021 and 2022.

And for hiring managers, understand that many job seekers are burned out. It’s a tough labor market for job seekers to find a job they are excited about. Maintain empathy during your search for candidates and understand that this could be their first interview opportunity after submitting dozens (or hundreds) of resumes.

Other Economic Data

Some other reported economic data from the jobs report (and the previous week) include:

  • Unemployment remains stable at 3.9 percent—the highest number since January 2022
  • Job growth in August and September was revised downward by 100,000 jobs—meaning the original September jobs number wasn’t quite as hot as the BLS previously reported
  • Layoffs remain low (1 percent of all separations)
  • People are quitting their jobs at rates they were before the pandemic (2.3 percent of all separations)
  • The U.S. economy grew 4.9 percent year-over-year in the third quarter
  • Initial unemployment claims rose week-over-week by 5,000 to 217,000. Continued unemployment claims also rose by 35,000 week-over-week.

This all occurred as the Federal Reserve continued to pause interest rate hikes in October, citing hope for an easing of the job market. This month’s report sees that hope come to fruition—at least for October.

“The labor market remains tight, but supply and demand conditions continue to come into better balance,” Federal Reserve chairman Jerome Powell said on Wednesday. “Nominal wage growth has shown some signs of easing, and job vacancies have declined so far this year.” These are all good signs in The Fed’s eyes that the labor market—and the overall U.S. economy—are finding a good balance while they try to get inflation under control.

“Evidence of growth persistently above potential, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Powell said.