WASHINGTON–The economy continues to add jobs at a strong clip even though the Fed has been raising rates in an effort to cool things down and tame inflation. But one credit union economist believes the data indicate the Fed rate increases are slowly having the desired effect.
Data released by the Labor Department showed employers added 261,000 jobs during October on a seasonally adjusted basis. That was down from 315,000 in September. The unemployment rate rose to 3.7%.
“The labor market cooled in October, with the unemployment rate rising despite a decline in participation,” said NAFCU Chief Economist and Vice President of Research Curt Long. “While there were some mixed signals in this report, it points to a market that is loosening incrementally. Next week’s CPI release will be more important to the FOMC, but job market trends support a step down to a 50-basis point rate hike in December.”
Wages Increase
A New York Times analysis echoed Long’s point
“The employment figures on Friday make clear that job growth is slowing, albeit very gradually,” the Times stated. “The question is whether such measured slackening will lead to meaningfully lower inflation, a sought-after path that policymakers refer to as a soft landing.”
According to the Labor Department’s latest numbers, average hourly earnings climbed by 4.7% in the year through October, slightly below the 5% rate through September.