Reading the Tea Leaves on the October Jobs Report
With surging hiring and a 20-year-low unemployment rate, today’s job market is good news for American workers. How long will the good times continue? On Friday, we’ll get the October update on jobs and pay from the federal government — here’s what we’ll be watching for:
- +174,000 new jobs added to nonfarm payrolls in October;
- Unemployment rate steady at 3.7 percent;
- Average hourly earnings up 2.9 percent from one year ago;
- Labor force participation rate steady at 62.7 percent.
One of the strongest signs of optimism in the job market is the number of job openings employers would like to fill, but remain open. In August, the economy set a new all-time record with 7.1 million unfilled jobs. By contrast, there are only about 5.96 million unemployed Americans today ready to be hired. That’s a shortage of about 1.2 million workers throughout the workforce — a sign today’s economy is reaching the limits of job creation, with many employers struggling to fill open roles.
Despite rising Fed interest rates, a cooling housing market, rising trade barriers and recent stock market losses, it’s likely the Friday jobs report will show that the labor market continued adding jobs at a strong pace in October. The economy has added a robust 211,000 jobs per month on average over the past 12 months, and we forecast another month of strong hiring in October, with 174,000 jobs added and an unemployment rate steady at 3.7 percent.
The Wage Picture
After years of slow wage growth, we see evidence that wages are rising for more workers today. Over the past two months, BLS surveys report average hourly wages up between 2.8 and 2.9 percent, and it’s likely that pace will accelerate in the coming months if the economy remains on track.
According to Glassdoor’s Local Pay Reports, median base pay for full-time workers increased to $52,746 per year in October, up 2.4 percent from last year. That’s slightly down from September’s revised pay growth of 2.5 percent, but still marks the fourth consecutive month of pay growth over 2 percent. Among metros, we’re seeing robust pay growth in the nation’s largest cities, with pay rising 4.0 percent in San Francisco and 3.4 percent in New York City.
Glassdoor Job Postings
Online job postings on Glassdoor tell a similar story of robust U.S. hiring. As of October 29, there are about 6.47 million open online jobs on Glassdoor, up from around 5.9 million one year ago. Among sectors, we’re seeing the nation’s strongest online hiring in health care — a sector with more than 930,000 open jobs on Glassdoor today — followed by retail, professional and business services, transportation and logistics, restaurants and food services, IT and manufacturing. These are the sectors likely to lead the pack in terms of job gains in the October BLS report.
As of the October BLS report, the economy will have added jobs for a remarkable 97 consecutive months — marking 112 months in total for the length of today’s long economic expansion. If the economy manages to continue on its current path for another eight months, it will tie the nation’s all-time record for longest streak of steady economic growth since the 1850s. That’s yet another historic milestone for today’s economy that we’ll be watching for closely in coming months.
To speak with Dr. Andrew Chamberlain about this month’s jobs report or labor market trends, contact pr [at] glassdoor [dot] com. For the latest economics and labor market updates, subscribe to email alerts here and follow @adchamberlain.