Job Market Improves

Financial FAQs

 “Total nonfarm payroll employment rose by 165,000 in October, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, in health care, and in transportation and warehousing.” BLS.gov

MarketWatch.com

Not only did the October unemployment rate drop to 4.1 percent but revisions to the last two months added 84,000 payroll jobs to what is now an expanding workforce that also added 421,000 employees to the workforce.

This is pushing up economic growth because more workers produce more goods. The Atlanta Fed’s GDPNow forecasts in the third and fourth quarters show above 3 percent real GDP growth.

But it’s also pushing up inflation for consumers as well as businesses, so the case is made that more rate hikes by the Fed are necessary. It will be sure to raise interest rates at least another 0.25 percent.

It won’t be enough. The lesson from the 2022 COVID-19 post-pandemic inflation surge was that if the Fed waits too long to begin to restrict credit it will take longer to bring inflation and everyday prices down.

It’s the same case today with the massive borrowing of $Trillions to fund the A.I. build out of data centers, which means credit has been too easy and won’t restrain higher inflation; especially with the additional costs of the tariffs and Iran war.

So the Fed must act now, or we will see a repeat of the 2020 inflation resurgence which didn’t peak for two years, until the Consumer Price Index reached an unacceptable 9 percent in July 2022.

It then took multiple rate hikes to get it back down to 3 percent but never again to its 2 percent target inflation goal.

The lesson seems to be that there’s not much chance of returning to a reasonable inflation rate if and until the Iran war and the Canadian trade war end that is hurting the auto industry, in particular.

But the fact is everything the Republicans have done in Trump II has been inflationary, including the massive tax cuts that have boosted our national debt to $41T, and interest to service the debt now exceeding $1T annually, which is larger than our annual military budget.

That is how Trump and his Republican Party have succeeded in siphoning so much of the wealth from working Americans into their hands, and why enough Americans have finally realized it’s time to throw the bums out.

And now we have the A.I. data centers about to replace people with bots. What will that do to our nonfarm payroll job market when A.I. data centers come to a neighborhood near you? No wonder polls show 75 percent of Americans want them either regulated or banned (NIMBYs).

So payrolls are expanding for the moment. The question will be for how long?

Harlan Green © 2026

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