The U.S. labor market, which has maintained significant momentum, is starting to slow, but Wednesday’s November jobs report looks far from the tipping point the Federal Reserve is aiming for in its fight against inflation.
Nonfarm payrolls are expected to rise by 200,000 from the previous month, while average hourly wages are expected to rise 4.6% from a year earlier, according to the median forecast of economists surveyed by Bloomberg. Although there are signs of weakening demand for labor, a much larger slowdown is needed to curb wage growth, which has fueled inflation, and to keep demand more in line with the supply of labor.
“The Federal Reserve has probably succeeded in stopping the growing imbalances,” said Michael Gaipen, head of U.S. economics at Bank of America Securities. We are now beginning to look for evidence that points to a declining situation,” he said.
After September’s upward revision to 315,000 month-on-month nonfarm payrolls, October rose to 261,000, the slowest growth since December 2020. indicates firm labor demand. A further slowdown is expected in November, but it is still strong relative to historical figures.
October US payrolls rise better than expected, unemployment rises – mixed ups and downs
The average hourly wage, which rose 4.7% year-on-year in October, is slowing down, but remains high. Federal Reserve Chairman Jerome Powell said inflation was 1.5 to 2 percentage points above what would normally be considered consistent with the Federal Reserve’s inflation target.
“Despite some signs of easing, there is still great underlying resilience and strength in the labor market,” said Nick Bunker, head of economic research at Indeed Hiring Lab.
Strong Wage Growth
The Atlanta Fed’s wage tracker has decelerated some but remains high
Source: Atlanta Fed, Current Population Survey, Bureau of Labor Statistics
According to the Current Employment Trends Survey (JOLTS) released by the U.S. Department of Labor on November 30, the number of job openings in October decreased by 353,000 from the previous month. While numbers suggest a easing in labor demand, job openings remain well above longer-term levels.
At 1.7 job openings per unemployed person, which is historically high, it was the lowest in a year.
Fed Chairman Jerome Powell said on November 30 that while the decline in job openings was “favorable,” he noted that “the gap between job openings and job seekers is about 4 million,” and the labor market returned to equilibrium.temporary signs‘, he claimed.
U.S. Jobs Fell, Signals Weak Labor Market, Positive Signs for Fed
news-rsf-original-reference paywall">Original title:US Labor Market to Cool Further But Not Enough Yet to Assure Fed(excerpt)
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