October Jobs Report: Slowing Inflation and Historically Low Unemployment Indicate the U.S. Has Arrived at a "Soft Landing"

OCTOBER JOBS REPORT: SLOWING INFLATION AND HISTORICALLY LOW UNEMPLOYMENT INDICATE THE U.S. HAS ARRIVED AT A “SOFT LANDING”

By Bernard E. Anderson, Ph.D.
Whitney M. Young, Jr. Professor Emeritus, The Wharton School, University of Pennsylvania, and Senior Economic Advisor, National Urban League

Job growth in October was hampered by two hurricanes and two major labor strikes, producing just 12,000 new jobs, but the economy continues to grow at a modest pace.

With inflation slowed to  2.41 percent and unemployment remaining historically low, many economists agree that the U.S. has achieved a “soft landing” – bringing inflation under control without triggering a recession.

Contrary to the hysteria fanned by political ads, no country’s economy compares with the U.S. or bounced back as well from the Covid 19 pandemic.  Many of those responding to pollsters emphasize the weight of continuing elevated inflation, but the rate of inflation has declined sharply and is expected to continue to a lower level in the next six months.  Supply chain disruptions have ended, reducing the impact that had on raising prices, and the Federal Reserve will cut interest rates again at least once before the end of the year.

 Consumer confidence is slowly rising, increasing the expectation of steady economic growth in 2025.

The overall unemployment rate was unchanged at 4.1%. With the white unemployment rate at 3.1% and the Black rate at 5.7%, the Black/white unemployment ratio of  1.5-to-1 remains well below the persistent 2-to-1 ratio where it had been stuck for decades.

The labor force participation rate was unchanged at 62.6% as was the number of people in the labor force who wanted a job, 5.7 million.  Long-term unemployment (those jobless for 27 weeks or more) was little changed at 1.6 million, up from 1.3 million a year ago.  Long-term unemployment accounted for 22.9 percent of all unemployed workers.

 The industries that showed the greatest employment growth in October were ,health care (+52,000, government (+40,000), professional/business services (-49,000), manufacturing (-46,000), and construction (+8,000). There was little or no change in other major industries.

Average hourly earnings rose 0.4 over the month to $ 35.46. Year over year AHE rose 4.0 percent. The average workweek remained unchanged at 34.3 hours.