The labor market remains solid despite a slight increase in unemployment

A slight rise in unemployment in October is the only blot on an otherwise strong employment picture for workers, according to data released Friday by the Bureau of Labor Statistics.

A significant number of jobs were created in October and wages remain on the rise overall. And hiring has been stronger in industries that previously lacked growth, including health care and manufacturing.

Investors reacted positively to the report, with the S&P 500 rising more than 1% immediately after its release.

Here’s what workers need to know about the latest employment figures:

  • The economy created 261,000 new jobs in October, a slight drop in gains from September (263,000 new jobs).

  • The jobless rate rose to 3.7%, up 0.2 percentage points from September. The total number of unemployed increased by 306,000 from the previous month. The unemployment rate has remained relatively stable, hovering between 3.5% and 3.7% since April.

  • The activity rate has hardly changed since last month: 62.2% in October against 62.3% in September. The activity rate indicates the percentage of the population that is working or actively seeking work.

Here are the other key points from the report.

Income growth is slowing, but wages remain high. Average hourly earnings rose almost 0.4% from September to October — a slight increase from the previous month (0.3%). Wages remain about 4% higher than they were a year ago.

Health care gained 53,000 jobs. Throughout 2022, health care employment grew by an average of 47,000 per month, a stark contrast to the average 9,000 added per month in 2019.

Manufacturing added 32,000 jobs. Manufacturing saw an average increase of 37,000 per month in 2022, a notable increase from 30,000 per month in 2021.

Leisure and hospitality are growing, but still lagging behind. 35,000 additional jobs have been added to the leisure and hospitality sector.

Is the labor market still dynamic?

Two key indicators, job offers and the resignation rate, show that job seekers still have opportunities in all areas. Additionally, there was little change in reported layoffs across all employment sectors, with the rate changing little from previous months.

Another report released earlier this week by the Bureau of Labor Statistics — the Job Openings and Labor Turnover Summary, or JOLTS — showed job openings remained strong, hitting 10.7 million in September after a plunge of a month in August when openings fell by more than 1 million. The largest increases in vacancies were seen in accommodation; food services; health care and social assistance; and transportation, storage and utilities. On the other hand, vacancies are beginning to decline in wholesale trade as well as in finance and insurance.

The JOLTS report also showed the quit rate held steady at 2.7% for the third month in a row, which economists say is a critical factor in the health of job prospects, as quitting shows that workers feel safe to change jobs.

Quit rates have risen in state and local government jobs, showing there could be more movement among workers in this sector. However, the reverse is likely true in three industries where quit rates have declined: construction; transportation, storage and utilities; and manufacturing durable goods.

Wages are also firmly in favor of workers: in another report published on October 28, the Bureau of Labor Statistics found that wages and salaries increased by 5.1% over a one-year period ending in September 2022. Over the previous year, ending in September 2021, wages and salaries increased by 4.2%.

While the overall employment picture looks rosy, several forecasts predict job losses in 2023. In September, the Federal Reserve predicted that unemployment would hit 4.4% next year. Bank of America, meanwhile, predicts an even higher unemployment rate of 5.5%.

The Federal Open Market Committee raised its federal funds rate again this week to bring inflation down, which should eventually lead to a higher unemployment rate.

Job prospects in your field

Workers wondering if it’s time to act might want to think about what’s going on with employment in their industry. Here’s what you need to know, based on data from the Bureau of Labor Statistics over time:

Employees in October: 7.7 million.

% change since September: +0.01%.

% change since February 2020: +0.98%.

Employees in October: 3.9 million.

% change since September: +0.22%.

% change since February 2020: +0.55%.

Employee in October: 9 million.

% change since September: +0.03%.

% change since February 2020: +1.37%.

Employees in October: 22.4 million.

% change since September: +0.13%.

% change since February 2020: -1.87%.

Health care and social assistance

Employees in October: 20.9 million.

% change since September: +0.34%.

% change since February 2020: +0.58%.

Employee in October: 3 million.

% change since September: +0.13%.

% change since February 2020: +5%.

Employees in October: 15.9 million.

% change since September: +0.22%.

% change since February 2020: -5.85%.

Employees in October: 12.9 million.

% change since September: +0.25%.

% change since February 2020: +0.47%.

Employees in October: 634,000.

% change since September: no change.

% change since February 2020: -11.58%.

Professional and business services

Employees in October: 22.5 million.

% change since September: +0.17%.

% change since February 2020: +4.28%.

Employees in October: 15.8 million.

% change since September: +0.05%.

% change since February 2020: +1.08%.

Transport and storage

Employees in October: 6.5 million.

% change since September: +0.13%.

% change since February 2020: +14.87%.

Employees in October: 5.9 million.

% change since September: +0.25%.

% change since February 2020: -0.22%.

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