Things are looking different in the job market. For several months now, the U.S. labor market has been on a cooling trajectory. The U.S. economy added only around 150,000 jobs in October, falling below expectations but still notching a solid month of employment growth, according to Bureau of Labor Statistics data.

October’s job growth came below September’s stronger-than-expected but downwardly revised total of 297,000 jobs.

“After the hot September, air conditioning has been turned on in October,” Sung Won Sohn, chief economist of S.S. Economics and a professor of finance and economics at Loyola Marymount University, told CNN.

The unemployment rate peaked at 3.9 percent, its highest level since January 2022.

“The October jobs report provides plenty of evidence that labor market conditions are softening and will allow the Fed to keep policy on hold as it monitors its progress toward returning inflation to 2 percent,” Nancy Vanden Houten, lead U.S. economist for Oxford Economics, wrote in a note.

Fed Chair Jerome Powell said in a recent news conference that the labor market has been moving into “better balance,” but that it’s likely there still needs to be slower growth on the jobs front to fully achieve price stability.

Job growth has slowed tremendously from its breakneck pace in 2021 and 2022, when monthly gains averaged 605,000 and nearly 400,000, respectively. 

The unemployment rate ticked higher to 3.9%, its highest level since January 2022.

October’s job gains are the lowest since June, but the October total reflects a 35,000-job decline in the manufacturing sector, specifically 33,200 jobs lost in the motor vehicles and parts industry. Those declines were attributed mainly to the United Auto Workers union strike that started mid-September against Ford, General Motors, and Stellantis. At the end of October, the UAW reached tentative agreements with the Big Three automakers to end the labor strikes, CNN reported.

On Wall Street, bond yields experienced a decline, and stock prices saw a significant surge following the release of the jobs report. These developments signal optimism that the Federal Reserve may opt against implementing further rate hikes, The Associated Press reported.

BREAKING: US economy adds 150,000 jobs in October, below expectations of 180,000.

The unemployment rate rose to 3.9%, above expectations of 3.8%.

This means the US economy has now added jobs for 34 consecutive months.

Is the labor market finally beginning to see some weakness?

— The Kobeissi Letter (@KobeissiLetter) November 3, 2023

Photo by Tim Mossholder: https://www.pexels.com/photo/help-wanted-sign-on-glass-5737622/