Economy Adds 250K jobs in October; Unemployment Rate Holds at 3.7%; Earnings Up

 

By Mark Lieberman

Managing Director and Senior Economist

 

Highlights

  • Number of payroll jobs INCREASED 250,000 in October
  • Unemployment rate in October REMAINED AT7 percent;
  • Average weekly earnings INCREASED $4.35 in October to $941.85, a 3.3 percent year-year gain, strongest annual increase since August 2010
  • Average hourly earnings GREW 5¢, in October a 3.0 percent annual increase
  • Private sector jobs INCREASED 246,000; Government payrolls were up 4,000;
  • Number of multiple jobholders INCREASED 176,000, suggesting 7 of every 10 new jobs went to individuals who were not already working
  • Prior month job totals were essentially unchanged: the number of new jobs in September was revised down 16,000 to 118,000 but the number of new jobs in August was revised up 16,000 to 286,000;
  • The number of persons unemployed GREW 111,000 to 6.075 million while the number of people employed INCREASED 600,000; The Labor Force, therefore, GREW 711,000;
  • The number of persons not in the labor force fell 487,000;
  • Labor force participation rate IMPROVED to 62.9 percent, the level it had reached in July; the Employment-Population ration (EPOP) GREW to 60.6 percent, highest since January 2009;
  • By sector number of manufacturing jobs INCREASED 32,000; the number of construction jobs was UP 30,000 and the number of healthcare jobs INCREASED 46,700;

Trends:

  • Payroll jobs were up for the 97th straight month
  • Construction jobs reached their highest level since March 2008 (127 months); manufacturing jobs reached their highest level since December 2008;
  • In a statistical quirk, even with revisions, the total number of payroll jobs for September remained at 149,500

Data Source  Bureau of Labor Statistics

Image result for employment situation

If incumbents designed an employment situation report to be released just four days before election day, they couldn’t have come up with a better report than the data released by the Bureau of Labor Statistics Friday.

The BLS report showed the number of jobs up in virtually every industry sector with the unemployment rate remaining at 3.7 percent, an almost 49-year low (the unemployment rate was 3.5 percent in December 1969).

Even average weekly earnings rose to a 3.3 percent year-year growth at $941.35, the fastest pace since August 201 (3.4 percent year-year). When earnings started to climb a few months ago, one of the reasons was that the number of low-paying retail and leisure-and-hospitality jobs had been declining and were not pulling down the average. But those two job categories grew 44,400 in September (about one of every six new jobs) while wages jumped.

The improvement should be a perfect platform for incumbents – Republican or Democratic – yet Republicans at least continue to campaign against “job-killing” Obamacare even though since Obamacare became effective in January 2014, the economy has added 12,376,000 jobs – an 8.9 percent increase.

One of the few negatives in the October jobs report was the increase in Black unemployment rate which grew from 6.0 percent in September to 6.2 percent. The improving labor market was also not kind to persons with a college degree: the unemployment rate for those without a high school diploma rose 0.5 percentage points to 6.0 percent and for high school graduates with no college rose to 4.0 percent from 3.7 percent.

The strengthening labor market drew 606,000 persons back to the labor force in October an increase of 20,000 over September.

Though Hurrican Michael made landfall in Florida during the reference period for both the household and establishment surveys, it had “no discernible effect” on the surveys. The household survey determines the unemployment rate and the establishment survey provides the count of new jobs. According to the BLS, the response rates for the surveys “were within normal ranges>”

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

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