The US economy added 42,000 private-sector jobs in October, a surprise to economists who were predicting 37,500. This is indeed good news in an otherwise uncertain time. The labor market is tight, with 7.2 million vacancies and 7.4 million people unemployed (not including the involuntary part-time workers). That’s because the recent jobs report wasn’t released last month. Now, it appears that too will not be released this month due to the federal government shutdown still in effect.
Federal Reserve Chair Jerome Powell focused on these economic realities in a press conference after the rate-setting committee’s meeting. He remarked on the cautious approach necessary when navigating uncertain economic waters, stating, “If you’re driving in the fog, you slow down.”
On the whole, despite October’s good news for job growth, the labor market has been falling further and further behind job seekers for years. Yet the data we’ve received recently paints a picture of an unprecedentedly turbulent economic time. In September, the loss in jobs was revised down to 29,000, a downward revision from the originally reported loss of 32,000. On top of that, August was revised down to a loss of 3,000 jobs. This volatility has led economists and investors to look for new insights into the shifting trends of the job market. Aggregate adjustments have become more tied to ADP’s employment data.
The report released last month showed that annual inflation jumped back up to 3%. That’s the hottest pace of inflation we’ve experienced since January. Continued inflationary pressure adds complication to the work of policymakers. They are doing all they can not to disrupt a strong economic recovery with aggressive measures.
Powell was clear that we need to keep collecting strong data to drive decisions moving forward. He stated, “We’re going to have to do our jobs one way or the other. I hope by the time of the December meeting, we’re getting a better flow of data.”