Total nonfarm payroll employment increased by 261,000 in October, slightly smaller than the 263,000 jobs added in September, according to the latest jobs report from the Bureau of Labor Statistics (BLS). Monthly job growth has averaged 407,000 through the first 10 months of 2022, compared to 562,000 per month in 2021. Job growth in October was concentrated in service-providing sectors, including education and health services, professional and business services, and leisure and hospitality. The unemployment rate increased 20 basis points month over month to 3.7% in October.
“We are in a market where good news is bad news. The job market largely brushed off uncertainty and continued to add above estimates,” says Zonda chief economist Ali Wolf. “Consumers are still spending significantly, allowing employers to continue to add. From a policymaker's point of view, this tells them there’s still more work to do to cool the economy and bring down inflation.”
In October, the count of unemployed persons rose by 306,000 to 6.1 million. The unemployment rate has remained within a narrow range of 3.5% to 3.7% since March.
“Labor force participation ticked down by one-tenth to 62.2, the second consecutive month of decline as many workers appear still hesitant to return to the labor market,” says Fannie Mae chief economist Doug Duncan. “Wages grew 0.4% in October and have grown 4.7% year over year, another month of robust growth and a clear indicator that firms remain eager to hire, though the imbalance between labor supply and labor demand is likely contributing to inflationary pressures in the economy.”
Joel Kan, vice president and deputy chief economist of the Mortgage Bankers Association (MBA) says while wage growth was strong on a year-over-year basis, the metric decelerated compared with the 4.98% year-over-year rate in September.
“This was the slowest rate of growth since August 2021,” Kan says. “The easing in wage growth might help reduce some inflationary pressure, but we expect the Federal Reserve to continue its current course of policy tightening until there is broader evidence of cooling inflation.”
The number of long-term unemployed—those jobless for 27 weeks or more—was little changed at 1.2 million in October, compared with 1.1 million in September. The long-term unemployed accounted for 19.5% of all unemployed persons. The number of individuals not in the labor force who currently want a job was little changed at 5.7 million in October and remains above February 2020 levels of 5 million. Individuals not in the labor force are not counted as unemployed because they were not actively looking for work during the four weeks preceding the Household Survey.
Among those not in the labor force who wanted a job, the number of individuals marginally attached to the labor force was 1.5 million in October. The number of discouraged workers, a subset of the marginally attached who believed no jobs were available for them, decreased by 11,400 to 371,000 in October.
Residential construction employment, including specialty trade contractors, grew by just 900 jobs in October, a deceleration from growth in previous months.