What employers need to know about the October jobs report
The anticipated release of the U.S. Bureau of Labor Statistics monthly jobs report was much to the surprise and delight of economists and employers alike on the morning of November 1, 2019. According to the report, October experienced solid job gains of 128,000, making this the 109th straight month of economic growth, more than double the previous record. Meanwhile, the unemployment rate increased slightly to 3.6% and average hourly ticked up by 6 cents, totaling $28.18. Here are the headlines from October’s report.
1. The Labor Market Remains Strong
Leading up to the release of the jobs report, economists were estimating low jobs numbers, ranging anywhere between 25,000 and 110,000, due to a United Auto Workers strike against General Motors. Despite the walkout, the labor market crushed expectations with 128,000 job gains last month. Furthermore, original job numbers for August and September were revised up by a net 95,000. The BLS report showed that the most jobs were created in food services and drinking places, business and professional services, social assistance, financial activities, and health care. Within the private sector, payroll processor ADP reported similar growth of 125,000 jobs last month.
2. Manufacturing Affected by General Motors Strike
Hiring in manufacturing has been particularly weak over the past several months due to trade tensions and a cooling global economy. However, this month’s hit of 36,000 job losses can largely be attributed to the strike at GM. The automaker’s longest nationwide walkout since 1970 began September 15 and stretched for six weeks, through the mid-month reference point that the BLS uses to calculate the monthly jobs report. While the strike has now ended, the BLS shows that the strike at GM kept at least 47,700 people out of work, perhaps even more if workers at parts suppliers were included. The Wall Street Journal expects next month’s hiring to “get a boost with auto workers returning to the job.”
3. More People in Need of Jobs
After dropping to 3.5% in September, the unemployment rate rose slightly to 3.6% last month, but for good reason: an additional 325,000 people entered the workforce. The highest level since August 2013, the number of job seekers increased from 62.2% to 62.3% in October. Within the labor force participation rate, more prime-age workers (ages 25 to 54) are entering the workforce, as well, hitting a 10-year high of 82.8% in October. Not all found jobs, which pushed the unemployment rate up, but the Wall Street Journal’s Eric Morath says “drawing workers off the sidelines points to a job expansion that has staying power.”
4. Wage Gains Continue to Outpace Inflation
After taking a slight dip in September, wages increased by 6 cents last month, totaling $28.18. Wage growth now sits at 3% for the year—an improvement from five years ago when wage growth hovered in the 2% range. Paired with low inflation, these wage gains translate into more dollars
in workers’ pockets. Ben Herzon, an economist for Macroeconomic Advisers, told the New York Times, “As long as confidence remains pretty elevated, as long as job gains continue albeit at a slower pace, and as long as those job gains continue to deliver wage growth, consumption should continue to drive the economy.”
The next jobs report will be released on December 6, 2019, at 8:30 a.m. EST. In the meantime, see how Monster can help drive job growth at your organization.