The Bureau of Labor Statistics Friday released its final monthly jobs report before the election. It estimates that the economy grew by 161,000 new jobs in October. That’s slightly lower than the average of the previous nine months and lower than the specific forecasts by Bloomberg and The Wall Street Journal, but well within the expected range forecast by most experts.
The Current Employment Survey of business establishments and government agencies stated that of these, 142,000 non-farm new payroll jobs were generated in the private sector, 19,000 in the public sector. In addition, BLS revised September’s new job growth numbers from 156,000 to 191,000 and August’s from 167,000 to 176,000. All these are seasonally adjusted numbers.
Overall, job growth has been steady but lower than in 2014 and 2015. Last year, the monthly average was 229,000 new jobs; this year, it has been 176,000.
The headline unemployment rate—labeled U3 by BLS statisticians and calculated from the Current Population Survey of 60,000 households—fell to 4.9 percent. Meanwhile, the civilian workforce in October fell by 195,000 after having risen by 444,000 in September. The employment-population ratio fell to 59.7 percent, and the labor force participation rate slipped slightly to 62.8 percent.
Another measure—U6—gauges both unemployment and underemployment. It fell in October to 9.5 percent.
The best news in the report was that nominal average wages rose over last month by a substantial 0.4 percent and from October 2015 to October 2016 by 2.8 percent. That’s the best showing since the financial crisis eight years ago.
Jared Bernstein adds a warning on wages:
There is, however, an important caveat to the current wage story. While the pay of most workers appears to have gotten a boost from the tighter job market, it may be that higher-paid workers are gaining faster. The growth in the hourly pay of blue-collar workers and non-managers has been stuck at around 2.5% over the past year. That’s still a full point above where it was a few years ago, but this difference–faster growth at the average compared to that of lower-paid workers–is suggestive of the earnings inequality pattern that’s been embedded in our labor market for decades.
There’s a hint in today’s report of one factor that could be in play in these differing wage dynamics. Net employment growth was exclusively in services last month, as goods-producing sectors added zero jobs. Factory jobs have declined (slightly) in each of the last three months, and they’re down 62,000 so far this year. Construction employment has also been weak. These sectoral pressures may be putting downward pressure on wage growth for mid-wage workers.
The BLS includes a "confidence level" in its estimate of plus or minus 105,000 jobs. This means the "real" number of new jobs created in October was not 161,000 but ranged between 56,000 and 266,000.
Each month the bureau calculates the job situation for Americans aged 25-54. People in this age group are those most likely to have a job or be looking for one. The employment-population ratio for the 25-54 age group peaked at 81.9 percent in April 2000 and sank to a low of 74.8 percent in November 2010. In October, for the first time in eight years, it rose to 78.2 percent.
Hours & Wages:
• Average hourly earnings of private-sector production and nonsupervisory employees rose 4 cents an hour to $21.72 in October.
• Average work week for all employees on non-farm payrolls remained unchanged in October at 34.4 hours.
• Average hourly earnings for all employees on private non-farm payrolls rose 10 cents an hour in October to $25.92.
• The manufacturing workweek in October rose 0.1 hours to 40.8 hours.
• The average workweek for production and nonsupervisory employees on private non-farm payrolls in October remained unchanged at 33.6 hours.
Job gains and losses in October for selected categories:
- Professional services: +43,000
- Temporary help services: +6,400
- Transportation & warehousing: +7,500
- Financial activities: +14,000
- Leisure & hospitality: +10,000
- Information: +4,000
- Education and health services: +52,000
- Health care & social assistance: +39,100
- Retail trade: -1,100
- Construction: +11,000
- Manufacturing: -9,000
- Mining and Logging: -2,000
Here's what the seasonally adjusted job growth numbers have looked like in October for the previous 10 years compared with this October’s gain of 161,000.
October 2006: + 4,000
October 2007: - 85,000
October 2008: - 483,000
October 2009: - 200,000
October 2010: + 257,000
October 2011: + 202,000
October 2012: + 132,000
October 2013: + 189,000
October 2014: + 200,000
October 2015: + 295,000