The latest snapshot of the economy will arrive on Friday morning when the government releases its monthly report on the labor market.
This report will be particularly important because it will offer Americans a final glimpse of the state of hiring, wages and unemployment before the midterm elections. Officials at the Federal Reserve are also watching the numbers closely to assess whether their aggressive efforts to rein in inflation are working, allowing the central bank to dial back its interest rate increases.
Forecasters surveyed by Bloomberg expect that employers added 200,000 jobs last month, a modest decrease from the 263,000 jobs created in September and a further indication that the labor market, though still strong, is cooling.
“The labor market is very tight but we’re beginning to see it soften,” said Sarah House, an economist at Wells Fargo. “When I think about where we are and where we’re going, I feel like hiring is losing altitude but thus far, it’s a controlled descent.”
One possible wrinkle that could skew the numbers is the effect of Hurricane Ian, which clobbered southwestern Florida at the end of September and destroyed countless businesses.
Economists — and the Federal Reserve — will also closely analyze two other data points in the report: average hourly earnings and the labor force participation rate. Both are key to understanding whether the supply and demand for workers are coming into balance. That would give the Fed some confidence that rapid wage growth, which contributes to rising prices, is slowing down.
The central bank’s policymakers on Wednesday raised interest rates another three-quarters of a percentage point, and signaled plans to keep raising them, though perhaps at a slower pace as they attempt to stem the fastest inflation in generations. The Fed’s policy setting committee is next scheduled to meet on Dec. 14.
Economists have been expecting the labor market to weaken as higher interest rates make it more difficult for businesses to grow. So far, however, hiring has been remarkably resilient even as other parts of the economy, like the housing market, have slumped.
Job openings, after falling significantly in August, rose in September to 10.7 million. That increase means there were roughly 1.9 job openings for every unemployed worker. The number of people who quit their jobs — typically a sign that workers are confident they will find better ones — ticked down to 4.1 million but remained high. Layoffs overall have stayed low.
The labor market “is clearly tight enough to support above-average job gains,” said Daniel Zhao, an economist at the career site Glassdoor. “But the question is how much cooling is actually going on. I think it’s a difficult question to answer.”
Sumber: www.nytimes.com
