What will the Fed do to get the unemployment rate to rise to 4.4%?
On Friday the Bureau of Labor Statistics reported 263,000 new jobs were added in September. While that growth seems like good news in this economy, it runs directly counter to what the Federal Reserve wants to see. And the even worse news for the Fed was that the unemployment rate fell back to 3.5%.
That low unemployment rate has to be driving the Fed nuts. Americans working and spending money is something they don’t want to see as they have forecasted a recession next year and are looking for the unemployment rate to reach 4.4%. This is a dark day for the Federal Reserve and its members, as their goal to put Americans out of work hasn’t worked out yet.
From the BLS: “Total nonfarm payroll employment increased by 263,000 in September, and the unemployment rate edged down to 3.5 percent…Notable job gains occurred in leisure and hospitality and in health care.”
Here are the areas where the report says jobs were created and lost. The government sector has had difficulty hiring people; some didn’t bother to go back to work for them. Transportation and warehousing jobs falling isn’t a surprise since many companies have hired too many people in that sector.
We have to remember this about jobs, even though we got all the jobs back lost to COVID-19, we are not back to the total levels we should be if COVID-19 never happened. So, think of it as playing catch up, as some of the consumption data is still positive for now.
Below is a breakdown of the unemployment rate and educational attainment for those 25 years and older. We have seen significant declines in the unemployment of Americans with the least amount of education in this report from August. Those with less than a high school diploma went from 6.2% to 5.6%, and those with just a high school education and no college went from 4.2% to 3.7%
- Less than a high school diploma: 5.6%.
- High school graduate and no college: 3.7%
- Some college or associate degree: 2.9%
- Bachelor’s degree and higher: 1.8%
October 7, 2022, 5:49 pm