The United States added 165,000 jobs in October, exceeding economist forecasts and signalling resilience in the labour market despite geopolitical tensions and persistent inflation, according to data released on Friday. The Bureau of Labor Statistics reported that the unemployment rate fell slightly to 4.1%. The figures represent a stronger-than-expected performance in a labour market that economists have characterised as being stuck in a "low-hire, low-fire" state, where job growth remains sluggish but layoffs stay rare.
Employment gains were concentrated in healthcare, transportation, warehousing and manufacturing. Earlier figures for August and September were revised upwards by a combined 84,000 jobs. Separate data showed that layoffs in September fell to their lowest level in a year and a half, whilst outplacement firm Challenger, Gray & Christmas reported just under 44,000 layoffs in October, representing a 71% decrease compared with October of the previous year.
However, wage pressures remain a concern for households. Average hourly earnings increased at an annual rate of 3.1%, slightly higher than the previous month, but this growth has lagged significantly behind inflation. The Bureau of Labor Statistics noted that inflation over recent months has substantially outpaced wage growth, leaving many consumers feeling the squeeze when purchasing essentials. In September, the annualised inflation rate stood at 3.7%.
The strong jobs report comes as geopolitical uncertainty continues to affect prices. Gas prices are averaging $1 a gallon higher than a year ago owing to conflict in the Middle East, whilst diesel prices, which power supply chains, are 60% higher compared with prewar levels. The Federal Reserve raised interest rates in September to a range of 3.75%-4%, citing inflation concerns. Although the central bank held rates steady at its October meeting, economists expect one more rate increase at the December meeting.
The jobs data arrives following midterm elections in which Americans indicated frustration with the economy, particularly high prices for fuel and groceries. Heather Long, chief economist at the Navy Federal Credit Union, said in a statement before the report's release: "Americans delivered a clear verdict in the midterm elections that the current economy is squeezing people financially and making it hard to get by, let alone get ahead. The labour market is a good example of why people are frustrated."