Below, EPI economists offer their initial insights on the jobs report released this morning, which showed 261,000 jobs added in October.
From EPI senior economist, Elise Gould (@eliselgould):
Read the full Twitter thread here.
In October, there were notable gains in Education and health services, Profession and business services, and Leisure and hospitality. And, finally, finally!, some signs of life in public sector employment. pic.twitter.com/Z7uVFVP55D
— Elise Gould (@eliselgould) November 4, 2022
While the public sector jobs gains in October are welcome news—particularly seeing signs of life in local government employment—state and local government employment continues to barely budge over the last year as private-sector employment is now 1.0% above pre-pandemic levels. pic.twitter.com/ThZLuP4p2Y
— Elise Gould (@eliselgould) November 4, 2022
“There is substantial disinflation in the pipeline that will allow inflation to normalize in coming months even if the labor market remains strong,” writes @joshbivens_DC. Policymakers can’t ignore the latest deceleration in wage growth for a soft landing. https://t.co/xBZjLnMaIp
— Elise Gould (@eliselgould) November 4, 2022
As overall unemployment ticked up, Hispanic unemployment retreated from it’s historic low in Sept, rising to 4.2% in Oct. Data are volatile but all groups ticked up last month. I hope that will reverse in coming months if policymakers let the labor market expansion continue. pic.twitter.com/vQcgDOCjYL
— Elise Gould (@eliselgould) November 4, 2022
Overall, today’s report was fairly strong with notable signs of cooling, particularly in wages. Wage growth over the last there months is consistent with long term productivity and inflation targets and a reasonable claw back of labor share (as corporate profits remain high). pic.twitter.com/44vlt0yqLS
— Elise Gould (@eliselgould) November 4, 2022
To be clear, the most recent three-month wage growth of 3.9% is consistent with trend productivity and 2% inflation and allows for a very reasonable claw back of labor share. At that rate, it would take maybe 4-5 years to restore labor share of income to pre-covid levels. pic.twitter.com/XVZiaAzehs
— Elise Gould (@eliselgould) November 4, 2022
From EPI president, Heidi Shierholz (@hshierholz):
Read the full Twitter thread here.
The unemployment rate increased to 3.7% in October, and not for “good” reasons—both the share of the working age population with a job and the labor force participation rate ticked down. (Though make no mistake, 3.7% unemployment is extremely low!) 2/
— Heidi Shierholz (@hshierholz) November 4, 2022
We’re starting to see the effects of the Fed’s interest rate hikes, but the labor market is still very strong. However, it takes a while for higher interest rates to have a big impact and there’s a real concern the Fed has overshot and secured a recession in coming months. 4/
— Heidi Shierholz (@hshierholz) November 4, 2022
One thing: there is still a giant gap in state and local govt jobs—they are down 541,000 since Feb ‘20, with over half of that, 281,000, in education. It’s crucial that state and local govts use their ARPA funds to raise pay and refill those jobs. 6/
— Heidi Shierholz (@hshierholz) November 4, 2022
An important caveat to the good private sector news is in nursing homes and residential care facilities. They have gained back only 20% of the jobs lost in the COVID recession and its aftermath. Also, child day care services are still down 8.4% from pre-COVID levels. 8/
— Heidi Shierholz (@hshierholz) November 4, 2022
But it’s worth noting that all groups are seeing far faster recoveries *than they did following the Great Recession.* From the start of the Great Recession, it took 10.4 years for Black unemployment to get down to 5.9%, but this time around it took 2.2 years. 10/
— Heidi Shierholz (@hshierholz) November 4, 2022
Of course, a recession caused by the Fed raising rates too aggressively would undo a great deal of the enormous gains, including the equity gains, that have occurred in the current recovery. 12/
— Heidi Shierholz (@hshierholz) November 4, 2022
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