This is the US unemployment rate for the month of October 2023

From January to October, the unemployment rate in the United States has risen from 3.4 percent to 3.9 percent.

In October, the figure rose 0.1 percent from 3.8 percent, a sign that the labor market may be softening after the Federal Reserve increased interest rates at a pace not seen in decades. Although the joblessness rate rose last month, the US economy still managed to add 150,000 jobs.

Currently, 167.7 million workers form part of the labor force —the largest number on record.

Evidence of softening in the labor market

On 18 October, Fed Chair Jerome Powell spoke to the ongoing shifts in the labor market, noting that “strong job creation has met a welcome increase in the supply of workers, due to both higher participation and a rebound of immigration to pre-pandemic levels.” While participation has increased overall, the participation rate still remains below pre-pandemic levels. The slowing of wage growth to a point that “would be consistent with 2 percent inflation over time” and the return of ‘quits’ to pre-pandemic levels signal to Chair Powell that “the labor market is gradually cooling.”

The Federal Reserve announced earlier this week that interest rates would not be increased further in November. However, this does not mean that further rate hikes could not come in the future.

“The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals,” read the statement released by the Federal Open Market Committee.

One of the indicators that the group is closely following is unemployment, and the October Employment Report indicates that conditions in the labor market are loosening, which could lead the FOMC to delay any further increases in interest rates this year.