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The strike in the automobile in the United States slows down employment in October

Job creation slowed more than expected in October in the United States, due in particular to the historic strike among the three major American automobile manufacturers, and the unemployment rate is up slightly, at 3.9%.

In October, 150,000 jobs were created, less than the 175,000 expected by analysts, and half as many as in September, the Labor Department announced Friday.

“Employment fell in the manufacturing industry due to the strike”, specifies the press release.

The three major American automobile manufacturers – General Motors, Ford and Stellantis – experienced an unprecedented six-week strike, which is now coming to an end, after agreements in principle concluded with the UAW union.

Employees on strike over the entire period taken into account are not counted as employees, Gregory Daco, chief economist for EY Parthenon, told AFP on Thursday.

Automotive strike in the United States slows down 'employment in October

United States: job creation slows © AFP – STAFF

These are 33,000 of the more than 45,000 strikers who added to the unemployment figures.

The unemployment rate increased by 0.1 point, to climb to 3.9%.

President Joe Biden, who is seeking a second term in the White House, welcomed an unemployment rate “below 4% for 21 months in a row, the longest period in more than 50 years.”

– Historically low unemployment –

“Employment growth remains positive, wages are slowing and the unemployment rate is close to historically low levels,” summarized Rubeela Farooqi, chief economist for HFE, in a note.

Auto strike in the United States slows employment in October

UAW members striking at Center Line, September 22, 2023 in Michigan © AFP – KAMIL KRZACZYNSKI

But she expects “the labor market to relax and economic activity to slow over time in response to restrictive monetary policy” from the central bank, the Fed, she said. precise.

Because the slowdown in the job market goes hand in hand with that of inflation.

The United States has been experiencing a significant labor shortage for more than two years, which has caused wages to soar, contributing to rising prices.

U.S. auto strike slows employment in October

The Fed's key rate © AFP – Samuel BARBOSA

To combat it, the Fed is pushing on rates in order to slow down consumption.

However, she left them unchanged on Wednesday, as during her previous meeting in September.

“The labor market remains tight, but supply and demand conditions continue to balance,” noted Fed Chairman Jerome Powell on Wednesday during a press conference.

Automotive strike in the United States slows employment in October

Fed President Jerome Powell on November 1, 2023 in Washington © AFP – SAUL LOEB

“Reducing inflation will likely require (…) some easing labor market conditions,” he warned.

The figures published Friday point in this direction, underlines Lydia Boussour, economist for EY, “with a marked slowdown in hiring, a slowdown in wage growth, a slight increase in the unemployment rate and a shorter work week”.< /p>

– Persistent shortages –

Employers, however, still encounter difficulties in recruiting.

“If every unemployed person in the country found a job, we would still have about 3 million jobs available,” noted Stephanie Ferguson, employment manager at the U.S. Chamber of Commerce, in a study published mid -October.

The automobile strike in the United States slows down employment in October

Unemployment in the United States © AFP – Samuel BARBOSA

These difficulties still worry businesses, both because of “the increase in labor costs” and shortages, showed the survey on activity in services published Friday by the professional federation ISM.

“Labor shortages are more persistent” than in 2019, Nela Richardson, chief economist of the business services firm ADP, also commented on Wednesday: when a sector recruits less, “it is difficult to know” if it is “because companies are hiring less or because they cannot find workers.”

The labor market has, however, seen, since the summer, an influx of new workers, “both due to (increase in) participation in the labor market and immigration”, welcomed Jerome Powell on Wednesday, which “partially explains why GDP (gross domestic product, editor's note) is so high.”

The growth of the gross domestic product (GDP) of the United States actually doubled in the third quarter, to 4.9% at an annualized rate.

All rights of reproduction and of representation reserved. © (2023) Agence France-Presse

Teilor Stone

By Teilor Stone

Teilor Stone has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining Thesaxon , Teilor Stone worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my teilor@nizhtimes.com 1-800-268-7116