The economy may finally be slowing after nearly two years of overheating. At least that’s one takeaway from the most recent jobs report released in November by the U.S. Bureau of Labor Statistics. 

The report showed the U.S. labor market softening in October, with employers adding 150,000 jobs – about half as many as were added in September. The weaker-than-expected job report reflected a decline in manufacturing and impacts of the United Auto Workers strike, which has since been settled.

While one month of data is not enough to indicate a trend, it will be interesting to see what the November data show when the BLS releases its next jobs report on Dec. 8. 

The national unemployment rate increased slightly to 3.9% in October, up from 3.8% in September. The unemployment rate has been below 4% for nearly two years, reflecting the tightest labor market since the late 1960s.

Like the national labor market, Utah’s booming job market has also cooled. Job growth decelerated in the last half of 2023, while the unemployment rate ticked up slowly. The Beehive State’s 2.7% unemployment rate in October is the highest it’s been since June 2021, yet remains well below historical averages. The only Utah industries that have experienced net job loss over the past 12 months are financial activities and trade, transportation and utilities.   

Nationally, wage pressure has softened over the last 18 months, slowing from a peak growth rate of 5.9% in March 2022 to 4.1% in October 2023. Slower wage and employment growth could help bring the annual inflation rate, which dropped to 3.2% in October, closer to the Federal Reserve’s 2% target. 

The economy continues to normalize after the historic shocks of the Covid-19 pandemic. After many months of growth above expectations, job growth in October finally showed that the labor market is softening. This is good news to the Federal Reserve, which has been ratcheting up interest rates to cool an overheating economy. If labor market pressures and price pressures continue to soften, the Fed may pause or pull back on rate hikes.