October Jobs slow, with no interest rate increase

The US Dept of Labor reported, on Friday, that there were 150,000 jobs created in the month of September, a decrease of an expected 190,000 showing that the efforts of the Federal Reserve in increasing interest rates has contributed to less employment by the nation’s employers and also the decrease in inflation from a June 2022 high of 9.1 percent to 3.7 in September is undoubtedly good news for Chair Jerome Powell, as the country regains from the Covid pandemic.

The result was that he and the members of the Federal Open Markets Committee agreed to hold off on another rate increase for fear of harming business and consumers. And, the FOMC can pat themselves on the back for their careful calibration, as we noted before.

3.7 percent is still higher than the preferred rate of 2 percent, but with only a soupcon of new jobs in the coming months, full employment may be reached. But that’s the future, as working families still face higher prices, and a conundrum to that is that American shoppers are still spending, and spending. While no one person, or entity, can find the exact reason, what is given is that shoppers are dipping into their savings to buy, yet even more, and while consumerism is the driving force of the United States economy, can it be done at the expense of savings?

That  question might remain unanswered, at the moment.

The Hill reported that Joseph Brusuelas, chief U.S. economist at audit and tax firm RSM, wrote in a Friday analysis, “The economy needs to add only 75,000 jobs a month, compared with 200,000 a decade ago, to stabilize employment given demographic changes.”

This report and earlier examples show that recession fears are vanishing, despite some chatter about a “soft landing” recession on Wall Street, as well as Main Street.

A note of caution is warranted, as the lowered numbers also reflect those UAW workers that were on strike, totalling 96,000 in combination with other striking workers, but it also shows the strength of the American worker, in what will become a major force in hiring, as well as protections against inflation.

There are also those who were laid off at the time of the report which increased the unemployment rate of 3.8 percent, to 3.9 percent, but can have a deleterious effect on working families, and single parent households; and, as Nick Bunker, economic research chief at Indeed, told Hill reporters, “The rise in unemployment is concentrated among workers who recently lost their jobs and the job finding rate of unemployed workers ticked down.”

Overall, despite these concerns, American workers are better off than they were in 2019, and the median figure for being unemployed is 8.9 weeks, Brusuelas noted in another interview.

Backtracking to wages we see, as he noted, that while there was an easing of 0.2 percent, it is still, at 4.3 percent, it is staying ahead of inflation, making the upcoming holiday season a little rosier for retailers.

Notwithstanding the Biden administration was pleased with the report and attributed the success to Bidenomics, its campaign styled label, and in a statement the White House said, “Today’s report shows that Bidenomics is growing the economy from the middle out and bottom up, not the top down.”

With more than 13 million jobs added since President Biden took office, he is justified in claiming that he has added more than his predecessors. Economists have also noted that this is the 34th straight month of employment gains.