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October’s labor market heats up as the U.S. reports the addition of 336,000 jobs, nearly double the predicted 170,000. This marks the highest jump since the beginning of the year. Further, revisions for job gains in July and August have escalated to a combined 119,000, propelling each month over the 200,000 benchmarks. This upward trend is not cooling off as anticipated by Federal authorities, suggesting possible interest rate hikes to counter inflation. Let’s delve into the current talent market dynamics and their implications for employers.
Key Insights:
- The unemployment rate remains steady at 3.8%
- September saw an impressive addition of 336,000 jobs, surpassing expectations.
- With a surge in workforce availability, wage growth currently experiences moderation.
- The sectors of leisure and hospitality, government, and healthcare & social assistance are leading in the numbers of jobs added.
Jobs Available
Data Source: U.S. Bureau of Labor Statistics (January 2022–September 2023)
Job openings continue to outpace hires, with 9.6 million total non-farm openings reported. This increase from July suggests a return to high post-pandemic numbers witnessed in 2021 and 2022. Leisure and hospitality demonstrated a significant surge, adding 96,000 jobs. The food services and drinking places sub-sector, recovering to its pre-pandemic level, contributed 61,000 of these jobs. Government jobs also experienced an upswing, growing by 73,000, a 34% increase above the average monthly gain of 47,000 over the past 12 months.
Unemployment
Data Source: Bureau of Labor Statistics (January 2023 – September 2023)
The unemployment rate remained unchanged at 3.8%, despite predictions of a drop to 3.7% in September. Strikes throughout the month could have been contributing factors to this unemployment rate. Increased job searches for the second consecutive month bring us closer to the levels seen in September last year.
Workforce Participation
Data Source: U.S. Bureau of Labor Statistics (January – September 2023)
Workforce participation remains steady at 62.8%. Hires changed little from 5.7 million to 5.9 million, and the employment rate is at a high of 60.4%. Women aged 25-54 are holding a record-high employment rate, at 75.3% for the sixth month in a row.
Wage Growth
September saw a 0.2% wage growth increase, just below the projected 0.3%. The yearly pay gain was 4.2%, the lowest since June 2021. This moderated wage growth may be due to the influx of new entrants to the workforce.
Future Factors to Watch
Inflation, labor strikes, consumer spending, student loans, and personal savings rates are variables to watch, as they can significantly impact the economic landscape.
What Does This Mean for Employers?
While more workers are available and wage growth is moderate, the job market remains competitive. Employers need to adopt effective strategies to stay ahead. This includes offering equitable pay and benefits in line with industry benchmarks, encouraging internal growth, expanding talent sourcing strategies, and considering temporary staffing. As we continue to explore the complex job market, we remain committed to providing resources to help you navigate these changes.
