Employment Situation: Sharp Rebound as Solid Growth Continues
November 2, 2018
Bottom Line: October saw a sharp rebound in job creation as the economy added 250k jobs, 50k more than expected. Gains were distributed broadly across industries with private service producing jobs rebounding particularly sharply after unusually low gains in September. Average hourly earnings were in-line with expectations and revised a touch lower in prior months -- but we are still seeing a very modest acceleration with 3-month annualized gains of 3.4% vs. 3.1% over the last 12 months and 2.6% in 2017. Additionally, average weekly earnings are starting to confirm the hourly earnings acceleration. Finally, the household jobs survey showed strong gains of 600k, holding the unemployment rate at 3.7% with the labor-force participation increasing. Overall, this was a solid report after last month's hurricane-impacted weakness and leaves the labor market at a trend job growth rate of 210-220k, remarkably strong this late in a cycle, with wage gains accelerating modestly.
Payroll Employment rose by 250k in October, compared with market expectations for an increase of 200k. The prior 2 months were revised, lower in September by 16k and higher in August by 16k.
Government jobs ROSE by 4k. Consequently, private sector jobs ROSE by 246k. Overall employment is now 1.7% ABOVE its year ago level, Over the past 12 months, 2,516k jobs have been created.
In October, the job gains were in:
- Trade, Transportation & Utilities (+35k with 2k of those in Retail Trade),
- Professional & Business Services (+35k with the addition of 3.3k in Temp Help Services),
- Education & Health Services (+47k),
- Leisure & Hospitality (+42k),
- Manufacturing (+32k),
- Construction (+30k),
- and Information (+7k).
Article by
Contingent Macro Advisors