The U.S. economy added 261,000 jobs in October, with the health care industry seeing the largest gains with over 50,000 new jobs, according to a new employment report from the U.S. Bureau of Labor Statistics (BLS).
In October, U.S. employers added 261,000 jobs, down from 315,000 jobs added in September. In addition, the unemployment rate increased slightly to 3.7%, and labor force participation declined slightly from 62.3% to 62.2%.
"This report confirms what we've been seeing — that the labor market remains strong because the U.S. consumer remains resilient," said Julia Pollak, chief economist at ZipRecruiter. "If demand for companies' goods and service remains strong, they will keep hiring. This remains the best job seekers' market of all time."
However, some economists say the decline in labor force participation could be problematic. "The weakening labor force participation rate is concerning because it shows job market is cooling in the wrong way," said Daniel Zhao, lead economist at Glassdoor. "It's unusual to see labor force participation falling because the labor market is hot — which should be pulling workers in off the sidelines."
In addition, the job market may be adding to inflationary pressure, especially as businesses continue to raise wages. In October, wage growth increased slightly, with average hourly earnings growing by 0.4% to $32.38.
According to Federal Reserve Chair Jerome Powell, the Federal Reserve will likely continue to raise interest rates high enough to weaken the job market and control inflation, which is currently at an almost 40-year high.
So far, the Federal Reserve has increased its short-term interest rate six times from close to zero in early March to a range between 3.75% to 4% now—the highest the rate has been in 14 years.
"Even though the labor market is strong, this means that a recession is more likely rather than less because it means the Fed is going to end up raising rates even more," said Augustine Faucher, chief economist at PNC Financial Services Group.
According to BLS' data, the health care industry saw the largest job gains in October, hiring over 52,000 new workers.
Overall, ambulatory care providers, which includes several provider types, saw the largest increase in jobs in October at 30,700. In addition, physicians' offices added 9,600 jobs, and nursing and residential care facilities added 11,100 jobs.
Meanwhile, hospitals and health systems added 10,800 jobs in October—down from the 27,500 jobs added in September. The only health care subsector to lose jobs was medical and diagnostic laboratories, which was down 3,300 jobs in October.
According to the American Hospital Association, the data shows that hospitals and health systems have worked hard to fill critical positions amid unprecedented workforce pressures, but increased demand and rising labor costs have caused hospital expenses to continue to outpace both volume and revenue. (AP/Politico, 11/4; Ember, New York Times, 11/4; Gurley, Washington Post, 11/4; Harrison, Wall Street Journal, 11/4; AHA News, 11/4; U.S. Bureau of Labor Statistics economic news release, accessed 11/9)
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