December 2, 2022

Workers and employers can do to boost mental health


Workers and employers can do to boost mental health

03:57

Employers added 263,000 jobs last month, the Labor Department said on Friday. It was the slowest month of hiring in 18 months, showing the red-hot job market is cooling slightly as the Federal Reserve hits the brakes on the economy.

The unemployment rate fell to a 50-year low of 3.5% in September as businesses continued to hire from a shrinking pool of workers. The labor participation rate fell slightly, indicating fewer people are working or looking for a job.

While hiring is slowing, investors and economists are looking for evidence that the Federal Reserve’s interest rate hikes are having a bigger impact. Instead, the data indicates that the labor market remains tight, with the jobless rate dipping to a five-decade low. 

“Today’s jobs report indicates the job market is chugging along, albeit at a slower pace, as available jobs still outnumber job seekers 1.7 to 1, and employer demand for talent remains elevated,” Cody Harker, head of data and insights at Bayard Advertising, a recruiting marketing firm, said in a note.

The biggest gains were in leisure and hospitality and health care.

The job market has been weakening for the past few months, with the three-month average job gains shrinking from roughly 530,000 a month at the start of the year to 370,000 today. Job openings fell by more than a million in August, to the lowest level since June 2021. 

Wage growth is also slowing, with average hourly earnings growing 5% over the last 12 months.

Stock markets plummet

Still, available jobs far outnumber job seekers, and the job market remains tight even as the Fed hikes interest rates.

Stocks fell on the jobs report, with the Dow plunging 2% and the S&P 500 falling 1.5% in early trading, indicating that hiring remains too strong for investors’ tastes. The strong monthly hiring figure means the Fed is likely to keep hiking interest rates sharply as it moves to slow down hiring in its bid to squash inflation.

“Good news for the economy is bad news for markets, unfortunately,” Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance, said in an email.

The fastest price increases in four decades are crushing Americans’ budgets and have become a major political liability for President Joe Biden’s Democratic Party moving into the midterm elections. Federal Reserve officials have signaled their willingness to keep rising rates until the job markets weakens significantly — even if its moves cause a recession.

“Today’s unemployment number dropping to 3.5% would normally be celebrated — and it is good news for workers and demonstrates the strength of the job market. But in today’s world, with a Federal Reserve laser focused on inflation, a stronger labor market is unlikely to lead to lower purchases and lower inflation,” Zaccarelli said.

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