The final US employment report before the presidential election was released on Friday, and it confirmed what continues to be an improving labor market.
US employers added 161,000 nonfarm payrolls in October, which was a bit lighter than the 173,000 expected by economists. Gains were driven by the addition of 142,000 private payrolls. Notably, manufacturing payrolls fell by 9,000 during the period.
“We suspect the rise in payrolls in October was hurt by weather effects,” High Frequency Economics’ Jim O’Sullivan said. “While there is no direct measure of weather effects in payrolls, the not seasonally adjusted household survey series on the number of nonfarm workers with a job who did not work because of bad weather rose by 214K, well above the 10K median rise in the past 10 October reports.”
Critically, the prior two month of payrolls data were revised up by 44,000 jobs, which more than offset October’s payrolls shortfall.
Meanwhile, the unemployment rate fell to 4.9% from 5.0% a month ago. This was largely attributable to the 195,000 Americans that dropped out of the labor force, which brought the labor force participation rate down to 62.8% from 62.9%.
Average hourly earnings climbed by 0.4% during the month, which was better than the 0.3% gain expected. This measure of wages is growing at a 2.8% pace year-over-year.
“The mix of reasonable job gains and accelerating wages lends some credence to the idea that slack has largely dissipated,” UBS’s Drew Matus said.
Below is a look at unemployment rates by demographic.
Unemployment rates for most demographics fell. The unemployment rate for black or African American workers climbed to 8.6% from 8.3%. The unemployment rate for high school graduates with no college ticked up to 5.5% from 5.2%.
Below is a look at jobs added by industry. The main areas of weakness continue to be manufacturing and mining and logging.
The monthly US employment report is among the most closely watch economic reports in the world. Friday’s report is one before American voters head to the polls on Tuesday to vote for their next president.
As the candidate representing dramatic change, Republican Donald Trump has been expected to pounce on a disappointing report, or even spin negatively an encouraging report.
Labor market trends overall remain strong
This week, the Department of Labor reported 265,000 unemployment insurance claims, marking the 87th consecutive week this figure has been below 300,000. You have to go back to 1970 to find a better time.
Monthly manufacturing surveys also signaled strength. The employment indices of the ISM manufacturing report, Philly Fed report, Kansas City Fed report, and Richmond Fed report.
While any short-term blip in the data may be cause for concern, it would take several months of disappointing data to cause the trends to inflect in a worrisome way.
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Sam Ro is managing editor at Yahoo Finance.
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