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Employment Situation: Slight Miss, But Positive Revisions

November 4, 2016
Bottom Line: Payroll Employment rose by 161k in October, compared with market expectations for an increase of 173k. But there were positive revisions to the previous two months which added a total of 44k jobs to get average job creation over the past 3 months to 176k vs. the past 12 months average of 196k. Most of the revision was in the public education category, where calendar effects of tallying payroll for teachers cause seasonal adjustments.

The unemployment rate dropped, as household employment dropped more than the decline in labor force. Over the past year, the unemployment rate has declined by 0.1 percentage points, the result of 2,728k more people finding jobs as 2,616k more people entered the labor force.

Both hourly and weekly earnings rose moderately after a moderate increase in September. The workweek was unchanged and the 3-month average is now 34.4.

Payroll Employment rose by 161k in October, compared with market expectations for an increase of 173k. The prior 2 months were revised, higher in September by 35k and higher in August by 9k.

Government jobs ROSE by 19k. Consequently, private sector jobs ROSE by 142k. Overall employment is now 1.7% ABOVE its year ago level, Over the past 12 months, 2,357k jobs have been created.

The Unemployment Rate FELL by 0.1 percentage points in October to 4.9%, compared with market expectations for a small decline to 4.9%.

Household employment fell by 43k while the labor force declined by 195k, resulting in a decrease in the number of unemployed of 152k.

The Labor Force Participation Rate FELL by 0.1 percentage points to 62.8%. The Employment-Population Ratio FELL by 0.1 percentage points to 59.7%.

The Index of Aggregate Hours ROSE by 0.2%, combining the moderate gain in private payroll and the steady workweek.

Hourly Earnings ROSE by 0.4% in October, above market expectations of 0.3%. Hourly earnings are now 1.7% ABOVE their year ago level.

Weekly Earnings also ROSE by 0.4%, the result of the change in hourly earnings and a steady workweek. Weekly earnings are now 2.5% ABOVE their year ago level. The Average Workweek was UNCHANGED by 0.0 to 34.4 hours, in line the market consensus at 34.4 hours.