Strong Jobs Report Boosts Fed Speculation
The Bureau of Labor Statistics on Friday reported total nonfarm payroll employment increased by 271,000 in October, while the unemployment rate fell to 5.0 percent. BLS also reported gains in hourly worker earnings.
BLS revised the change in August employment from +136,000 to +153,000 and revised September numbers from +142,000 to +137,000. Over the past three months, job gains averaged 187,000 per month.
“October jobs bounced back as gains came in stronger than even we expected,” said John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C. “Average hourly earnings ticked up, supporting the case for continued improvement in the labor market and a Federal Open Market Committee move in December.”
The report said the number of unemployed persons (7.9 million) were essentially unchanged in October. Over the past 12 months, the unemployment rate and the number of unemployed persons fell by 0.7 percentage point and 1.1 million, respectively.
BLS said the civilian labor force participation rate was unchanged at 62.4 percent in October, following a decline of 0.2 percentage point in September. The employment-population ratio, at 59.3 percent, changed little in October and has shown little movement over the past year.
The report said the number of persons employed part time for economic reasons edged down by 269,000 to 5.8 million in October. It said 1.9 million persons were marginally attached to the labor force, down by 276,000 from a year earlier. Among the marginally attached, there were 665,000 discouraged workers in October, little changed from a year earlier.
BLS said the average workweek for all employees on private nonfarm payrolls remained at 34.5 hours in October. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, while factory overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours.
Average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $25.20, following little change in September (+1 cent). Hourly earnings have risen by 2.5 percent over the year. Average hourly earnings of private-sector production and nonsupervisory employees increased by 9 cents to $21.18.
Silvia said the broad sweep of the jobs report suggests evidence of more than just “some” improvement in the labor market.
“The unemployment rate is well within the Fed’s central tendency for full employment, and the U-6 unemployment rate also ticked down noticeably in the month,” Silvia said. “Reduced slack in the labor market is beginning to lead to increased wages, which have now risen 2.5 percent year over year.”
