The labor market remains strong — while cracks continue to form. Plus: Europe braces for an insolvency wave, bitcoin volatility dies down, and more

Welcome to?This Week in Finance , your weekly digest of the top news, conversations, and voices trending among financial professionals on LinkedIn. Click 'Subscribe' to be notified of each edition. This week:

U.S. jobs growth still hot in October

The U.S. economy added 261,000 jobs in October, blowing past economists' expectations for 193,000 new payrolls — and reinforcing the view that the Federal Reserve will continue lifting interest rates to cool the economy and slow inflation. Average hourly wages rose a faster 0.4% from September. The unemployment rate meanwhile rose 0.2 percentage point to 3.7%, even as labor participation slipped. Fed officials pointed to a strong labor market in raising rates by another three-quarters of a percentage point on Wednesday.

• The numbers were in contrast to a glum week in the tech industry, where companies such as Apple and Amazon moved to implement hiring freezes and Lyft, Stripe, Hootsuite, and more announced sweeping layoffs .
• Here's what people are saying.

• Canada's jobs boom beats estimates : The nation's job market surprised economists by adding 108,000 positions in October, far higher than the estimated 10,000 gain. All jobs lost between May and September were recouped.
• Why is productivity slumping? : Workers in the U.S. have suddenly become less productive. The slump is mystifying, because productivity rocketed early in the pandemic. Economists have several theories as to what may be happening.

Fed delivers fourth jumbo rate hike

The Federal Reserve again hiked interest rates by 0.75 percentage point, the fourth consecutive increase of that magnitude, but opened the door slightly to the possibility that tightening could ease. The central bank on Wednesday lifted its target for the benchmark federal funds rate to a range of 3.75% to 4% — the highest level since 2008 — as it seeks to douse the hottest inflation in more than four decades. Policymakers added in a statement that they would “take into account the cumulative tightening of monetary policy” in their consideration of further rate increases.

In remarks following the announcement of the rate-setting decision, Chair Jay Powell said:

• The pace of monetary tightening matters less now than how high interest rates go — or for how long they remain there.
• It remains "premature" to think about pausing hikes, and "ongoing increases" are likely needed to return inflation to 2% (from 8.2% today).
• While wages are "moving sideways at an elevated level," he doesn't see them as being the key driver of inflation.
• The labor market has yet to show significant signs of softening, and he would "love to see job vacancies and quits coming down."
• Here's what people are saying.

• BoE follows Fed with jumbo hike : The Bank of England raised interest rates by 0.75 percentage point in its biggest hike since 1989, taking the base rate to levels not seen since the 2008 financial crisis. In its outlook for the economy, the BoE forecasted the UK's longest recession on record.

• BoC: Supply won't replace rate hikes : The Bank of Canada said solving supply issues would help to get inflation under control, but wouldn't take the place of interest-rate hikes.
• Is the ECB close to turning dovish? : Instead of the European Central Bank's rate hike last week, many investors focused on the fact that Christine Lagarde, the ECB president, acknowledged a likely recession in the eurozone — something she had resisted up until then.

Insolvency wave hitting Europe

Insolvencies worldwide are predicted to rise by 10% in 2022 and 19% in 2023. This resurgence could hit European businesses particularly hard, with SMEs being the most vulnerable. Significant rises are projected to occur in France (+46% in 2022; +29% in 2023) and the UK (+51% and +10%), according to a new study . “Germany and Italy are still registering low levels of insolvencies, but the trend should reverse next year,” said Maxime Lemerle, a lead analyst with Allianz Trade. Inflationary pressures, monetary tightening and interest-rate hikes by central banks, high energy bills, and supply-chain disruptions are combining to drive insolvencies as they limit companies' cash flows. ?? Here's what people are saying.

• Europeans cut back on spending : The drop comes as average inflation in October hit a record of 10.7% across Europe, and more than half of countries in the region saw double-digit price rises across sectors. Indicators point to eurozone growth slowing and much of the bloc facing a recession this winter.

Investor 'revolution' at BlackRock

Predicting a coming “revolution in shareholder democracy ,” the CEO of the world’s largest asset manager announced plans to let more investors in its funds vote in corporate elections. BlackRock boss Larry Fink said his firm’s Voting Choice program — an initiative announced last year to let institutional investors and some individuals vote at shareholder meetings — was now open to investors representing $1.8 trillion of its $3.8 trillion in index funds. It’s recognition, Fink said, that a growing number of investors want “a meaningful way” to express their views on companies’ governance and social stances.

• Fink said the change will mean corporate leaders “will have a broader set of shareholders with whom to engage.”
• That could result in public companies running political-style campaigns to woo a bigger base of voting investors, The New York Times notes .
• Here's what people are saying.

Fintech darling Stripe cuts 14% of staff

Payment system Stripe is preparing for “leaner times” and letting go of more than 1,000 employees, CEO Patrick Collison announced Thursday in a public note to staff. Though the fintech company is one of the world’s most valuable startups , Collison admits its leadership was “much too optimistic about the internet economy’s near-term growth in 2022 and 2023” and “overhired.” The cuts, which amount to 14% of its workforce, bring Stripe’s headcount down to roughly the 7,000 employees it had in February. ?? Here's what people are saying.

The risks of BNPL

Younger consumers of buy now, pay later (BNPL) products, which require little or no credit history, now hold the most defaulted accounts in the programs. While 11% of all borrowers paid at least one late fee on the installment loans in 2021, 18% of those aged 18 to 29 fell behind on their payments, according to a Federal Reserve report. The programs, which gained popularity as the pandemic forced shoppers online and are expected to be worth $1 trillion by 2030 , are now in the sights of credit bureaus. Equifax and Experian have said they will start including BNPL purchases on consumers’ credit reports — and that loans sent to debt collectors can also be reflected. ?? Here's what people are saying.

Bitcoin has finally become 'boring'

Bitcoin, the world's most popular cryptocurrency, has become far less volatile over the past few months, bouncing around $20,000. But this relative stability, which comes as big tech firms are seeing their valuations fluctuate wildly , should potentially be seen as a good thing, CNBC reports . “Bitcoin being stuck in such a range does make it boring, but this is also when retail loses interest and smart money starts to accumulate,” said Vijay Ayyar, head of international at crypto exchange Luno. Cryptocurrencies have tanked this year, losing $2 trillion in value since the peak of their 2021 rally. ?? Here's what people are saying.

Singapore trials digital dollar

A digital currency known as purpose-bound money is being trialed in Singapore, in a move that would develop capabilities for a digital equivalent of physical money issued by the central bank . The Monetary Authority of Singapore said it will work with DBS Bank, OCBC Bank, UOB, and Grab on four related projects. The use of digital currencies for government payouts would, for example, enable recipients to receive money even if they don’t have a bank account. Central banks from Hong Kong, Thailand, China, and the United Arab Emirates have recently successfully tested a new cross-border digital currency platform . ?? Here's what people are saying.

• Asian debt grows as USD climbs : With Asian governments and companies holding debt denominated in the U.S. dollar, they pay more in local currency to settle the obligations. The South Korean won, Philippine peso, and Indian rupee have declined 17%, 12%, and 10% in the past seven months. Asian currencies are likely to weaken further as U.S. interest rates rise.

With?Cate Chapman ,?Jessy Bains ,?Theunis Bates ,?Harriet Sinclair , Manas Pratap Singh , Ilan Goren , Polly Dennison , Melissa Cantor , Sam Shead , and Ting Wei Toh .

What's your take on the week's news and other developments impacting you or your business? Join the conversation in the comments below.