- Total non-farm payroll employment increased by 128,000 and the unemployment rate remained at 3.6 percent, according to the Bureau of Labor Statistics.
- The Labor Force Participation (LFP) rate was little changed at 63.3 percent. The Employment-Population ratio also rose slightly to 61.0 percent and has increased 0.6 percent over the year. Both measures were up, according to the BLS, by 0.4 percentage point over the year.
- Food Services and Drinking Places emerged as the leading sector in October adding 48,000 jobs.
- Federal Government (-17,000) declined as a result of temporary workers completing their advance 2020 Census work.
- Financial Activities added 16,000 jobs with gains taking place in the real estate and rental and leasing sector (+10,000). Another sub-sector credit and intermediation saw a rise of 6,000 jobs.
- Based on the growth in individual and family services, the Social Assistance sector added 20,000 jobs.
- Employment in other industries also did not change from September to October: Mining, Construction, Wholesale Trade, Retail Trade, Information, Transportation and Warehousing.
- Health Care continues to add jobs (+15,000). Over the past year, the sector has added 402,000 jobs.
- Average hourly earnings rose by 6 cents to $28.18. Since October 2018 wages are up 3.0 percent.
- In October, the average workweek for all employees remained at 34.4 hours.
- The number of persons employed part-time changed little at 4.4 million. The number of long-termed unemployed (greater than 27 weeks) remained unchanged at 1.3 million and accounted for 21.5 percent of all unemployed.
- Revisions to the two previous months counted 95,000 more jobs than reported initially. August 2019 was revised up 51,000 from +168,000 to +219,000 and September 2019 was revised up 44,000 from +136,000 to +180,000.
ANALYSIS
Today’s payrolls report exceeded the low expectations. Wall Street expected as few as 85,000 jobs.
No doubt driving those expectations were the General Motors strike. The BLS also noted that federal Census hiring stalled due to a lull in temporary workers. Specifically, Manufacturing decreased by 36,000 jobs in October. The “GM-effect” which pulled 42,000 jobs out of the motor vehicles and parts sub-sector only slightly shaded manufacturing as a whole.
The jobs number was impressive given the worries about manufacturing sentiment. The Institute for Supply Management said its manufacturing index wobbled up to 48.3% in October from a 10-year low of 47.8%. Still, the American jobs machine more than just muddles on. After revisions to the two previous months, a key indicator of momentum, job gains have averaged 176,000 over the last three months.
Both workers who are “marginally attached to the labor force” and “discouraged workers” are down from a year ago: 262,000 and 165,000 respectively. While the BLS reported that the Labor Force Participation rate remained unchanged, approximately 325,000 workers entered the workforce.
Job growth is a pronounced topic in discussions about the strength of the U.S. economy and the good news often has analysts second-guessing predictions. “Over the past decade, the labor market has demonstrated surprising strength many times even as other measures of the economy cast a shadow of doubt. It’s doing so again,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
The BLS reported a gain of 129,000 private sector jobs nearly matching the ADP National Employment Report estimate of 125,000 jobs.
Unemployment continues to decline across all educational attainment groups. The rate for workers with less than a high school diploma is now 4.8 percent— far lower than the pre-recession rate of 7.0 percent in January 2006 (See Figure 1). The college educated cohort current enjoys an unemployment rate of 2.0 percent. In the last 12-month period, the average unemployment rate is as follows: for those with less than a high school education (5.5 percent); high school graduates-no college (3.7 percent); Some college or associate’s degree (3.1 percent) and bachelor’s or higher (2.1 percent.)
