Unemployment Steady at 4.1%
Jobs Growth
The labor market essentially stalled in October, with net creation of only 12,000 new jobs. In addition, activity in the previous two months was adjusted downward, resulting in a combined 112,000 fewer jobs. The average monthly gain over the past 12 months fell to 194,000 new jobs.
Top Industries
Positive trends continued in the healthcare and government sectors, while losses were again reported in both manufacturing and temporary help services, the former due to strike activity.
Unemployment
The unemployment rate held steady at 4.1% in October.
Wages
Average hourly earnings continued to trend positively in October, registering an increase of 0.4%, which matched the September rise. As a result, the rate of gains over the past 12 months was maintained at 4.0%.
Work Week
The average work week came in at 34.3 hours.
Temporary Job Trends
Employment in the temporary jobs sector contracted further in October, with a loss of 48,500 jobs over the month.
What Does It All Mean?
The lack of significant job creation in October is a clear disappointment, but is it a tipping point for the start of negative growth or simply an outlier, best minimized until it can be viewed in the context of more data?
According to the Bureau of Labor Statistics, which issues the monthly jobs report, the October numbers were impacted by two major hurricanes and strike activity. Anomalies like these can affect not only the actual creation of jobs but the ability of employers to report on that activity. Furthermore, based on past experience, these types of effects are usually temporary, with negative impacts typically reversed in future months.
Until more data becomes available, it appears that downward revisions in recent months may signal a slowing in the labor market. Whether that is true evidence of a downturn or a case of level-setting to pre-pandemic conditions is unclear. Worth noting is that even with the shave given to September numbers (from 254,000 to 223,000), the month represented the highest level of activity in the past 6 months.
When the jobs numbers are set aside, the economic outlook is much brighter, with consumer spending, wages, GDP and inflation all moving in the right direction.
One thing certain at this time is uncertainty. Workers and employers may be hesitant to make commitments until things stabilize more. Once the election is over, it may be far easier to focus on the future. Workers can be more confident in evaluating job prospects. Employers can be more proactive in securing the best resources to support growth and prosperity. A strong and committed workforce is the key to achieving that vision.
Sources: U.S. Bureau of Labor Statistics, Staffing Industry Analysts, NBC, FOX, CNN, CNBC, The Wall Street Journal, New York Times, Bloomberg.
