Daily Brief: The US Added Half A Million Jobs Last Month, Sure, But Workers Still Have The Upper Hand

Daily Brief: The US Added Half A Million Jobs Last Month, Sure, But Workers Still Have The Upper Hand

over 2 years ago3 mins

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Data out on Friday showed the US added a better-than-expected 531,000 jobs last month, even if once-confident companies have started to get a little… needy.

What does this mean?

It’s been a rough few months for the US job market, with the previous two updates falling short of expectations. But things were back on track in October, as the US added 18% more jobs than expected last month and its unemployment rate fell to 4.6% – a new post-pandemic low. The leisure and hospitality sector had a lot to do with that, adding more jobs than any other industry. But carmakers played their part too: they’ve been hiring more to keep up with demand, helping drive employment in factories up by the most since June last year.

Jobs
Source: The New York Times

Why should I care?

For you personally: What goes around…

Companies are used to calling the shots in interviews, but no more: there are so few people looking for work and so many vacancies that prospective employees are finally able to demand more money. So it follows that average hourly earnings climbed by almost 5% last month compared to the same time last year – the biggest rise since February. Trouble is, higher wages might come back on you in different ways: rising costs could push companies to raise prices to protect their profits, so you might have to foot the bill anyway.

Wages
Source: The New York Times

The bigger picture: The Fed’s in a Catch-22.

The Federal Reserve described America’s situation as “complicated” last week, which is probably a bit of an understatement. Those rising prices, after all, might force the central bank to lift interest rates to keep inflation from spiraling out of control. But it’s also keenly aware that rate hikes will make businesses less inclined to spend money on, say, hiring – and given that there are still more than four million fewer jobs than before the pandemic, that’s not exactly something it wants to discourage.

Keep reading for our next story...

Uber Reported Mixed Results, But The Ride-Hailing App Has A New First To Celebrate

Uber image

Uber reported mixed results late on Thursday, but nothing’s going to rain on the ride-hailing giant’s first profitable (ish) quarter.

What does this mean?

Revelers and merry-makers of all kinds are finally back in action, and they’ve been hopping into Ubers to get wherever they need to go. And it shows: the company saw 39% more trips last quarter than the same time last year, and the total value of bookings was up 67%. Uber did so well, in fact, that it finally reported its first-ever quarterly profit.

Uber bookings

Take that with a pinch of salt, mind you: the company’s investment in Chinese self-driving car company Didi has plummeted by $3.2 billion, even if it hasn’t realized those losses. A handful of salt, actually: Uber’s profit forecast for this quarter came in worse than expected, maybe because the company’s worried lockdowns are set to make a comeback.

Why should I care?

The bigger picture: Uber has some explaining to do.

Uber’s food delivery service was a gift last year: the drop-off in its ride-hailing segment was – at least in part – offset by Uber Eats, which nearly tripled its revenue last year versus the year before. But it’s still not profitable, even as the ride-hailing segment posted a profit of more than $500 million last quarter. And that won’t help placate impatient investors, who had already sent its stock down 11% this year before the announcement.

Uber segments

Zooming out: Big summer blowout.

Uber isn’t the only “sharing economy” firm to fret about lockdowns: Airbnb previously warned that this summer – usually the busiest time for the vacation rental giant – might be a quiet one. What it didn’t anticipate was that the working-from-home trend would allow vacationers to mix business with pleasure, taking longer and more frequent trips. That helped push its profit up by a massive 280% compared to last year, which might be why investors initially sent its stock up 3%.

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