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Hiring slows down in US in Oct as employers use caution
Employers in the US pulled back on hiring new individuals in October this year adding just about a decent 1,50,000 jobs, reflecting signs that the labor market was still resilient against economic uncertainties and high interest rates, all of which have made borrowing costlier for companies and consumers.
Washington: Employers in the US pulled back on hiring new individuals in October this year adding just about a decent 1,50,000 jobs, reflecting signs that the labor market was still resilient against economic uncertainties and high interest rates, all of which have made borrowing costlier for companies and consumers.
October's job growth, according to a Labour Department report, was down sharply from a robust 2,97,000 recorded in September but solid enough for last month to indicate many companies continue their hiring spree amidst a sturdy economy, media reports said.
Economists were quick to point out that job growth shrunk by atleast 30,000 due to the auto workers strike across the US by The United Auto Workers.
The strikes ended this week with tentative settlements in which the companies granted significantly better pay (25 % wage hike against 37% demand through a 4-year contract) and other benefits to the union's workers.
The unemployment rate rose from 3.8 per cent to 3.9 per cent in October, the report said.
The US job market has remained steady even as the Federal Reserve raised its benchmark interest rate 11 times since March 2022 to contain inflation at a targeted 2 per cent while slowing down the economy in the process.
"Cool hiring and tame inflation," hit a four-decade high last year.
The jump in hiring by employers has helped boost consumer spending, the primary driver of the economy, ABC news reported.
Employers have added a healthy 225,000 jobs a month over the past three months.
ABC quoted multiple agencies to say that the jobs report from the government comes at a time when the Fed is assessing incoming economic data to determine whether to leave its key interest rate unchanged, as it did this week, or to raise it again to curb inflation.
In September, consumer prices rose 3.7 per cent from a year earlier, down drastically from a Y-O-Y (year-over-year) peak of 9.1 per cent in June 2022 but still 1.7 per cent over the Fed's 2 per cent target level.
The Fed monitors closely the monthly job data to assess whether employers are still hiring and raising pay aggressively as a result of labour shortages.
The Federal Reserve’s main objective is to calibrate their key interest rates to simultaneously cool inflation, support job growth and ward off a possible recession. Inflationary pressures have eased as the Fed has raised sharply borrowing costs.
As any wage increase for old hires or new hires can fuel inflation, price rises have caused inflation to remain well above the Fed's 2 per cent target, and workers' year-over-year pay gains would need to fall further to be consistent with the central bank's inflation target, ABC reported on the Fed's mood.
Though economists had warned of an impending recession triggered by the Feds relentless 22 month rate hike last year, the world's largest US economy, has been durable and resilient.
