Editor's Note: This report is based on survey data from September 2022 that was published in October 2022. This is the most recent data available. (Source: Bureau of Labor Statistics)

The U.S. added more than 260K jobs last month, narrowly exceeding the approximately 250K jobs economists predicted and reinforcing the resilience of the labor market despite growing concerns surrounding economic downturn.  

Similarly, after a 0.2% increase last month, the unemployment rate again fell to 3.5%. This figure, once again, outperformed the consensus among economists that the rate would show little to no month-to-month movement.  

Another sign of the labor market’s continued strength is the upward pressure on wage growth, which increased at an annualized rate of 5% over the month. What’s more, the number of people working part-time for economic reasons but wanting full-time jobs decreased by more than 8%.

Regarding new job growth, the leisure and hospitality industry was back on track last month with 83K new payroll entries–nearly 75% of which are in bars and restaurants. Still, an additional 1.1 million jobs (about 7% of the total industry) need to be recovered to return to pre-pandemic levels.  

The healthcare industry also saw significant gains last month with 60K new jobs added; this places healthcare staffing back in line with pre-pandemic figures. Additionally, the professional and business services industry increased their ranks by almost 50K, and the manufacturing and construction industry grew by about 20K jobs each.

The only industries to report a net reduction in their payrolls were the financial activities sector and the transportation and warehousing industry, both of which lost about 10K jobs apiece.  

Meanwhile, the percentage of employees working remotely continues to plummet, dropping another 1.3% from 6.5% last month down to 5.2%. Notably, this number is down by more than 30% from May 2020 when it first began being tracked.  

Mployer Advisor’s Take:  

Under most circumstances, the addition of several hundred thousand jobs and a two-tenths reduction on a historically low unemployment rate would be welcome signs of a strong labor market and thriving economy. In context, however, the rate at which new jobs are being added does appear to be softening, certainly when compared to the year-to-date.

Further, while there are still about one and a half times as many job openings as there are job seekers, the total number of job openings is down by about 10% over just the past couple months.  

In a vacuum, low unemployment and upward wage pressure are great for the labor market, but the labor market does not exist in a vacuum. Federal Reserve leadership has indicated that it believes these factors are the primary drivers of inflation; what’s more, Fed leadership has also made it clear that inflation is the greater evil compared to higher unemployment and the downward pressure on wages that will result from increasing interest rates.  

Regardless of any evidence linking our current inflationary woes with ballooning corporate profits and lingering supply chain issues, the Fed appears resolute in its rate-hiking prescription. Although such measures will almost certainly affect wages and the labor market, it remains to be seen if these new rates will have their intended effect.

In the former case, the question is a matter of when, in the latter case the question is a matter of if. Both are questions we will seek to answer here in future installments.

Eager for more exclusive content? Check out the Mployer Advisor blog, or review last month’s employment numbers here.

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