Job creation slowed more than expected in the United States in October, particularly due to the historic strike at America’s big three automakers, and the unemployment rate rose slightly to 3.9%.
150,000 jobs were created in October, fewer than the 175,000 analysts expected and half as many as in September, the Labor Department said Friday.
“As a result of the strike, employment in the manufacturing sector declined,” the release said.
The three major American automakers – General Motors, Ford and Stellantis – endured an unprecedented six-week strike that is now coming to an end after reaching agreements in principle with the UAW union.
Employees who went on strike throughout the period under consideration would not be counted as workers, Gregory Daco, chief economist at EY Parthenon, told AFP on Thursday. That’s 33,000 of the more than 45,000 strikers who contributed to the unemployment figure.
The unemployment rate rose by 0.1 percentage points to 3.9%.
President Joe Biden, seeking a second term in the White House, hailed an unemployment rate “below 4% for 21 consecutive months, the longest stretch in more than 50 years.”
Historically low unemployment
“Job growth remains positive, wages are slowing and the unemployment rate is close to historically low levels,” HFE chief economist Rubeela Farooqi summarized in a note.
But she expects the Fed to “ease the labor market and slow economic activity over time in response to the restrictive monetary policy,” she said precisely.
Because the slowdown in the labor market goes hand in hand with that of inflation. The United States has experienced a severe labor shortage for more than two years, driving up wages and contributing to rising prices.
To counteract this, the Fed is pushing up interest rates to slow consumption. However, she left this unchanged on Wednesday, as at her previous meeting in September.
“The labor market remains tight, but supply and demand conditions remain balanced,” Fed Chairman Jerome Powell noted during a news conference on Wednesday.
“Some easing in labor market conditions will likely be required to bring inflation down,” he warned.
The figures published on Friday point in this direction, highlights Lydia Boussour, economist at EY, “with a significant slowdown in hiring, a slowdown in wage growth, a slight increase in the unemployment rate and a shorter working week”.
Ongoing bottlenecks
However, employers still face difficulties in recruiting staff.
“If every unemployed person in the country found a job, we would still have about three million job openings,” noted Stephanie Ferguson, director of employment at the U.S. Chamber of Commerce, in a study released in mid-October.
These difficulties continue to worry companies, both because of “rising labor costs” and shortages, according to the survey on activity in the services sector published on Friday by the professional association ISM.
“Labor shortages are more persistent” than in 2019, Nela Richardson, chief economist at business services firm ADP, also commented on Wednesday: If a sector is recruiting less, “it’s difficult to know” whether that’s the case “because companies are hiring less.” .” or because they can’t find workers.”
However, the labor market has seen an influx of new workers since the summer, “due to both (increased) labor force participation and immigration,” welcomed Jerome Powell on Wednesday, which “partly explains why the GDP (gross domestic product) (Editor’s note). ) is so high”.
Gross domestic product (GDP) growth in the United States doubled to 4.9% on an annual basis in the third quarter.