October Payrolls: 165,000 new jobs offset wage lag

U.S. employers created 165,000 positions in October, marking a rebound in hiring activity. The Labor Department released these figures on Friday, showing the unemployment rate declined to 4.1%, down from 4.2% in September. This drop in joblessness offers some relief to workers seeking stable income, though the pace of pay increases has not fully matched the cost of living.

The Labor Department also adjusted its earlier counts. August and September employment totals were revised upward by a combined 84,000 jobs. Health care, manufacturing, and business services led the October growth. Conversely, the restaurant and construction sectors reduced their staff levels during the same period.

Wage growth showed a modest uptick. Average salaries rose 3.1% year over year in October, a higher annual increase than the previous month. This gain still falls short of the 3.7% inflation rate recorded in September. Energy prices spiked earlier this year following the war with Iran, driving up consumer costs faster than paychecks have grown.

Cory Stahle, an economist at the Indeed job-search website, noted the disparity. “Workers are losing ground right now,” Stahle said. “The longer it wears on, the more and more they’re going to feel that.” This sentiment aligned with voter behavior in the recent midterm elections, where high prices contributed to Republicans losing their majorities in both the House and the Senate.

The Federal Reserve held its benchmark interest rate steady last week. With unemployment at historically low levels, the central bank has prioritized controlling inflation. Investors currently anticipate a rate hike when the Fed’s policymakers convene in December.