October BLS Report: Payrolls Beat Expectations Despite Temporary Headwinds
The latest jobs numbers are out from the Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor Senior Economist Daniel Zhao:
The American economy added 128,000 jobs in October, beating consensus estimates that had forecast under 100,000 payrolls gains, according to this morning’s jobs report from the Bureau of Labor Statistics. Facing temporary headwinds from the GM-UAW strike and Census drawdown, the labor market continued to truck along, indicating that the fundamentals of the labor market remain healthy.
Payrolls for September were revised upward from 136,000 to 180,000 jobs added. Similarly, payrolls for August were revised from 168,000 to 219,000 jobs added. In total, the revisions add an additional 95,000 over the last 2 months, mitigating concerns of a labor market slowdown.
If not for the recent auto worker strike and Census drawdown, today’s jobs report would’ve been a blockbuster with its healthy job gains, solid upward revisions and recovering wage growth.
Manufacturing payrolls dropped 36,000 with auto manufacturing specifically dropping 41,600. That is largely the result of the GM-UAW strike though BLS had placed earlier estimates of affected workers at 47,000. The less-than-expected drop is a sign that spillover effects from the strike were small and that the overall labor market remains healthy.
Additionally, federal government employment dropped 17,000 with 20,000 temporary Census workers being laid off. Overall, the Census Bureau expects to hire half a million workers by early 2020, but most of those job gains will likely appear in early 2020.
Last month’s report had a surprise drop in the unemployment rate and growth in average hourly earnings. Both rebounded in October with the unemployment rate rising marginally to 3.6 percent, and average hourly earnings growing annually at 3.0 percent. Unemployment remains near its lowest rate since 1969, and the rebound in wage growth is a sigh of relief after a dramatic deceleration in September.
The labor force participation rate increased 0.1 percentage points to 63.3 percent, and the employment-population ratio held at 61.0 percent. While neither shifted substantially in October, their steady increase over the last year is a healthy sign for a labor market continuing to draw workers off the sidelines despite demographic pressures from an aging population.
Services sectors added 157,000 jobs overall, continuing a yearlong trend of strong jobs growth. Some of the largest gainers in October include leisure & hospitality (+61,000 jobs added), education & health services (+39,000), and professional & business services (+22,000).
The goods-producing sectors, excluding auto manufacturing, also performed well with construction adding 10,000 jobs. Construction faces increasing demand for workers as interest rates drop and housing picks up. In Glassdoor’s October Job Market Report, construction job openings were up 14.8 percent year-over-year and wages for construction workers increased 6.1 percent, a sign of high demand for construction workers.
October is traditionally the first month of employment gains for the holiday season and retail added 137,200 jobs on a seasonally unadjusted basis. That’s a 0.9 percent month-over-month increase in retail employment, well above the trend in the last 3 years. That’s in line with Glassdoor research which found a 4.0 increase in job openings for retail workers and is a sign that demand for retail workers is elevated as we head into the holiday season.
Today’s jobs report caps a busy week of economic news. The Federal Reserve announced a third round of rate cuts but is messaging a pause unless conditions worsen. Q3 GDP growth is estimated to come in at 1.9 percent amid weakening business investment. Today’s jobs report is a nice positive surprise, showing that the labor market has managed to ride a more positive wave than the broader economy.
To speak with Daniel Zhao about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.