What’s Going On Here?Data out on Friday showed the US added a better-than-expected 531,000 jobs last month, even if once-confident companies have started to get a little… needy. What Does This Mean?It’s been a rough few months for the US job market, with the previous two updates falling short of expectations. But things were back on track in October, as the US added 18% more jobs than expected last month and its unemployment rate fell to 4.6% – a new post-pandemic low (tweet this). The leisure and hospitality sector had a lot to do with that, adding more jobs than any other industry. But carmakers played their part too: they’ve been hiring more to keep up with demand, helping drive employment in factories up by the most since June last year. Why Should I Care?For you personally: What goes around…
Companies are used to calling the shots in interviews, but no more: there are so few people looking for work and so many vacancies that prospective employees are finally able to demand more money. So it follows that average hourly earnings climbed by almost 5% last month compared to the same time last year – the biggest rise since February. Trouble is, higher wages might come back on you in different ways: rising costs could push companies to raise prices to protect their profits, so you might have to foot the bill anyway.
The bigger picture: The Fed’s in a Catch-22.
The Federal Reserve described America’s situation as “complicated” last week, which is probably a bit of an understatement. Those rising prices, after all, might force the central bank to lift interest rates to keep inflation from spiraling out of control. But it’s also keenly aware that rate hikes will make businesses less inclined to spend money on, say, hiring – and given that there are still more than 4 million fewer jobs than before the pandemic, that’s not exactly something it wants to discourage. | 