The following is MBA VP and Deputy Chief Economist Joel Kan’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in October.

“Job growth for October was slightly stronger than expected, with a gain of 261,000 jobs. The number of jobs added to the economy did slow from September’s total, but this was still a strong positive gain that kept the monthly average for 2022 at over 400,000 jobs added per month. Most of the October growth was in the service sector, while the goods producing industries saw the lowest gain since January 2022. Construction employment was essentially flat over the month, consistent with the slowdown in the home building sector.

“The unemployment rate increased slightly to 3.7 percent from 3.5 percent last month, despite a slight decline in labor force participation. This increase reflects the second time in three months where there has been an uptick in the number of unemployed workers.

“Wage growth, as measured by average hourly earnings, decelerated to a 4.73 percent year-over-year rate, compared to 4.98 percent in September. This was the slowest rate of growth since August 2021. The easing in wage growth might help reduce some inflationary pressure, but we expect the Federal Reserve to continue its current course of policy tightening until there is broader evidence of cooling inflation.”