Announced this morning, the economy added 150,000 jobs in October, less than expected. The Health Care and Social Assistance industry was relatively strong while the Motor Vehicle and Parts industry was relatively weak. The Unemployment Rate increased one tenth to 3.9% and the Labor Force Participation Rate at 62.7% is one tenth lower than the previous month. Average Hourly Earnings increased 0.2% in October, slightly less than expected, and grew 4.1% on an annual basis. In addition, Average Weekly Hours were 34.3, which is one tenth lower than the previous month.
Overall, another month where jobs were added to the economy, albeit less than the previous month, coupled with a slight rise in the unemployment rate. The labor market is a bit softer than it was earlier in the year. Average hourly earnings increased less than expected in October and the annual increase has moved down, close to the 50-year average. Slight moves lower in participation and weekly hours highlight the softer report. Meanwhile, this week The Federal Reserve decided not to increase rates for the second meeting in a row but maintained their “higher for longer” stance on policy, given inflation remains above their target. As long as people are employed, they are likely to continue spending money. How long that lasts and how well company earnings can hold up in this environment will be key for the economy and markets in the coming months.
Following the release of the jobs report, the yield on the U.S. 10-year treasury ticks lower and equity futures are higher as we head into the market open.
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