Jobs Rise as Employers Keep Hiring, But So Does Unemployment

To view this email as a web page, click here.

What's Happening Today

Despite the Federal Reserve's ongoing campaign of aggressive interest rate hikes and rising worries they could tip the economy into a recession, U.S. employers continued to hire last month, the Labor Department's latest jobs report shows. The U.S. economy added 261,000 jobs in October, a slowdown from September's upwardly revised gain of 315,000, but more than the 205,000 economists had expected.

At the same time, 306,000 more people became jobless, bumping the unemployment rate from 3.5% to 3.7%, the same as it was in August. This could be a sign that monetary tightening by the Fed is beginning to hurt the economy, as it is meant to. However, that figure remains low by historical standards and is still near pre-pandemic levels.

Now you might be thinking, how can jobs and unemployment both rise? Well, they're actually based on two separate surveys, one of employers, the other of households. Employers (generally viewed as the more accurate of the two) said the economy added jobs, and households said they were lost.

The mixed signals left some economists scratching their heads, but taken together offer a distinct impression that while the labor market is still good for workers, it could get harder to find and hang on to jobs.

"No one should be concerned that the U.S. labor market is about to start sinking," Nick Bunker, head of economic research at job hunting site Indeed, said in a commentary. "Joblessness is still low and job growth is strong, but today's report shows it may be springing some leaks."

- Diccon

Editors' Picks

Homebuying Got Less Diverse in 2022 (The Balance)

Inflation to Dampen Holiday Spending, Retail Trade Group Forecasts (CNBC)

Interest Rates Will Keep Rising. How High Will They Go? (CNN)

How Do High-Yield Savings Accounts Work? (The Balance)

How To File for Unemployment Benefits (The Balance)

'Sufficiently Restrictive' Is the Fed's New Buzzword. What Does It Mean? (Bloomberg)

How Can We Teach Our Kids the Value of Money? (The Balance)

Term of the Day

Unemployment Rate

The unemployment rate is the number of unemployed divided by the number in the civilian labor force. Everyone without a job isn't necessarily unemployed, at least according to the Bureau of Labor Statistics. To be counted in the unemployment rate, you not only have to be without a job, you also must have actively looked for work in the past four weeks.

If you were temporarily laid off and are waiting to be called back to that job, you're still counted. If you've given up looking for work, you're not counted in the unemployment rate. Many people argue that the real unemployment rate is much higher, since it should count those discouraged workers.

Off the Charts

The rate of job growth has been on a distinct downward trend this year. While the number of jobs added in October was above typical pre-pandemic levels, it was the lowest in nearly two years and a sign that the job market is losing steam.