The attached file contains this articles commentary as well as tables and charts of the data.
Employment: Surprisingly Strong Gains Continued
November 4, 2022
Bottom Line: Job gains were stronger than expected in October, and there were net upward revisions to previously reported data. At 261k, the gains were robust but still consistent with a modest deceleration in trend relative to the six- and 12-month average gains of 347k and 442k, respectively. Education and health services, a source of well-paying jobs and particularly tight labor markets, gained 79k jobs, slightly above the 12-month trend rate and showing no signs of slowing. Trade, transportations and utilities, the largest segment, saw a rebound in hiring but still showed a modest deceleration in the trend.Countering the robust establishment survey data, the household survey showed a surprise decline, driving the unemployment rate up two-tenths to 3.7% as the labor force participation rate held steady, as it has for much of the year. Finally, average hourly earnings rose slightly more than expected. The wholesale trade sector saw particularly strong gains, suggesting the slowdown in consumer activity is having little impact on employment within the supply chain.Overall, this was a solid labor report, and the trend rate of job growth is decelerating only very slightly. Given the Fed's focus on the strength of the labor market as a critical factor behind sustained inflation, this report will likely be fodder for the hawks that they need to do more to fight inflation.Payroll Employment rose by 261k in October, compared with market expectations for an increase of 265k. The prior 2 months were revised, higher in September by 52k and lower in August by 23k.
- Government jobs ROSE by 28k. Consequently, private sector jobs ROSE by 233k.
Overall employment is now 3.6% ABOVE its year-ago level.Over the past 12 months, 5,303k jobs have been created.In October, the job gains were in:
- Trade, Transportation & Utilities (+24k with 7k of those in Retail Trade),
- Professional & Business Services (+39k with the addition of 11.8k in Temp Help Services),
- Education & Health Services (+71k),
- Leisure & Hospitality (+35k),
- Manufacturing (+32k),
- Government (+28k),
- Other Services (+9k), and
- Information (+4k).
The Unemployment Rate ROSE by 0.2 percentage points in October to 3.7%, compared with market expectations for a no change to 3.5%. Household employment fell by 328k while the labor force declined by 22k, resulting in an increase in the number of unemployed of 306k.The Labor Force Participation Rate FELL by 0.1 percentage points to 62.2%. The Employment-Population Ratio FELL by 0.1 percentage points to 60.0%. The number of people Working Part-Time for Economic Reasons FELL by 186k to 3,577k. while Long-Term Unemployment ROSE by 98k to 1,165k (accounting for 19.2% of the unemployed), while the Mean Duration of Unemployment ROSE by 0.6 weeks to 20.8 weeks. There are now 6.1 million people officially unemployed. In addition, there are another 5,717k people who say they want a job but are not currently looking for one. Finally, another 3,577k people are working part-time because of slack economic conditions.The Index of Aggregate Hours ROSE by 0.2%, combining the solid gain in private payroll employment and the steady workweek.Hourly Earnings ROSE by 0.4% in October, below market expectations of 0.4%. Hourly earnings are now 4.7% 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 3.8% ABOVE their year-ago level.The Average Workweek was UNCHANGED at 34.5 hours, BELOW the market consensus at 34.7 hours.
Article by Contingent Macro