Labor market continues to show strength amid high interest rates and uncertain future

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The nation's employers scaled back their hiring in October, adding a modest but still decent 150,000 jobs.

Workers pour concrete to create part of a bus stop in the Manhattan borough of New York City on Thursday, October 12, 2023. On Friday, the U.S. government issues the October jobs report. Friday’s jobs report brought some obvious signs of cooling to a labor market that has been red-hot since the post-pandemic economic recovery that has been able to defy a record-setting pace of rate hikes and elevated borrowing costs to keep the economy afloat.

“With the job market fluctuating all year, and an unexpected jump in the numbers a month ago, it’s not entirely surprising the numbers are down this month. This may be a case of employers simply wanting to be a bit more cautious about bringing on new full-time employees with an uncertain outlook for 2024,” said Shai-Lee Spigelman, general manager of Fiverr Pro, an online freelance market.

The labor participation rate, or adults who are working or looking for work, was 62.7% in October, which is hovering around pre-pandemic levels. It may be difficult for the labor force to continue to grow in the long term as most people who are actively seeking work have been able to find it. “What we’ve seen is a very positive rebalancing of supply and demand, partly through just much more supply coming online” Powell said. “You see wage increases coming down, as we discussed, but coming down, you know, in a kind of gradual way. I think that’s what we want to see, that whole set of processes continue.”

Economists and investors are projecting the Fed will continue with its pause through the end of the year.

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