November 3, 2018

On the October 2018 Employment Situation Summary (110218): 250K SA Jobs Added; Jobless Rate Stays at 3.7 Percent; 12-Month Hourly and Weekly Earnings Strengthen; Another Record-Low Hispanic Jobless Rate

Filed under: Economy,Taxes & Government — Tom @ 10:28 am

I’ll have more to say about yesterday’s employment report tonight. For now, it suffices to say that it was very strong, with few if any blemishes.

From the Bureau of Labor Statistics Friday morning (permanent link with tables):

Total nonfarm payroll employment rose by 250,000 in October, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, in construction, and in transportation and warehousing.

Household Survey Data

The unemployment rate remained at 3.7 percent in October, and the number of unemployed persons was little changed at 6.1 million. Over the year, the unemployment rate and the number of unemployed persons declined by 0.4 percentage point and 449,000, respectively.

Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.4 percent), teenagers (11.9 percent), Whites (3.3 percent), Blacks (6.2 percent), Asians (3.2 percent), and Hispanics (4.4 percent) showed little or no change in October.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.4 million in October and accounted for 22.5 percent of the unemployed.

The labor force participation rate increased by 0.2 percentage point to 62.9 percent in October but has shown little change over the year. The employment-population ratio edged up by 0.2 percentage point to 60.6 percent in October and has increased by 0.4 percentage point over the year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 4.6 million in October. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

Establishment Survey Data

Total nonfarm payroll employment increased by 250,000 in October, following an average monthly gain of 211,000 over the prior 12 months. In October, job growth occurred in health care, in manufacturing, in construction, and in transportation and warehousing.

Health care added 36,000 jobs in October. Within the industry, employment growth occurred in hospitals (+13,000) and in nursing and residential care facilities (+8,000). Employment in ambulatory health care services continued to trend up (+14,000). Over the past 12 months, health care employment grew by 323,000.

In October, employment in manufacturing increased by 32,000. Most of the increase occurred in durable goods manufacturing, with a gain in transportation equipment (+10,000). Manufacturing has added 296,000 jobs over the year, largely in durable goods industries.

Construction employment rose by 30,000 in October, with nearly half of the gain occurring among residential specialty trade contractors (+14,000). Over the year, construction has added 330,000 jobs.

Transportation and warehousing added 25,000 jobs in October. Within the industry, employment growth occurred in couriers and messengers (+8,000) and in warehousing and storage (+8,000). Over the year, employment in transportation and warehousing has increased by 184,000.

Employment in leisure and hospitality edged up in October (+42,000). Employment was unchanged in September, likely reflecting the impact of Hurricane Florence. The average gain for the 2 months combined (+21,000) was the same as the average monthly gain in the industry for the 12-month period prior to September.

In October, employment in professional and business services continued to trend up (+35,000). Over the year, the industry has added 516,000 jobs.

Employment in mining also continued to trend up over the month (+5,000). The industry has added 65,000 jobs over the year, with most of the gain in support activities for mining.

Employment in other major industries–including wholesale trade, retail trade, information, financial activities, and government–showed little change over the month.

The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.5 hours in October. In manufacturing, the workweek edged down by 0.1 hour to 40.8 hours, and overtime was unchanged at 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls, at 33.7 hours, was unchanged over the month.

In October, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $27.30. Over the year, average hourly earnings have increased by 83 cents, or 3.1 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $22.89 in October.

The change in total nonfarm payroll employment for September was revised down from +134,000 to +118,000, and the change for August was revised up from +270,000 to +286,000. The downward revision in September offset the upward revision in August. … After revisions, job gains have averaged 218,000 over the past 3 months.

Quick comments:

  • According to Zero Hedge, the 25oK in jobs added “smash(ed) expectations” ranging from 105K to 253K.
  • In a separate post, ZH noted that “the job market continues to grow at a blistering pace with the following key highlights of greatest impact: “Manufacturing has soared with +296,000 jobs added this year; Construction wages +4.2%, beating overall 3.1% rate (best in nearly a decade); Lowest Hispanic unemployment rate ever.”
  • The impact of the work week increase is that weekly earnings are up by 3.4 percent in the past 12 months — even higher than the 3.1 percent increase in hourly wages.
  • Full-time employment is up by 2.576 million in the past 12 months.
  • Though the figure is admittedly quirky and subject to sharp swings, it’s hard to ignore the fact that total employment per the Household Survey has increased by just over 1 million in the past two months.

I haven’t had time to do the full-blown BizzyBlog Reality Check, but I can say that today’s seasonally adjusted results of 250,000 jobs added overall, including 246,000 jobs added in the private sector, fairly reflect the underlying strength of the raw data.

UPDATE, 10 P.M.: Here’s the Reality Check detail —

NSAvsSAanalysis1018

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1 Comment

  1. [...] strong jobs report was the 24th issued since Donald Trump’s election, and the 21st covering full months he has [...]

    Pingback by BizzyBlog — November 4, 2018 @ 8:04 am

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