The U.S. economy defied expectations by creating 128,000 new jobs in October, and official numbers for the prior two months were revised upward by 95,000 jobs.
However, a tweet from President Donald Trump that celebrated 303,000 jobs — which employed some creative economic modeling — confounded many economy-watchers.
The impressive jobs report beat forecasts for an 85,000 figure, and sent markets on a tear. October’s results were partly impacted by General Motors’ strike that temporarily removed 46,000 workers from the books; the Bureau of Labor Statistics noted that the strike reduced motor vehicle jobs by 42,000.
Under certain scenarios — which include upward several adjustments — it’s possible the jobs data would have topped 200,000, a brisk number considering the slowing economy. Yet shortly after the data’s release, Trump lauded the “blowout” number on Twitter, but suggested the true jobs figure would have been 303,000:
Wow, a blowout JOBS number just out, adjusted for revisions and the General Motors strike, 303,000. This is far greater than expectations. USA ROCKS!
— Donald J. Trump (@realDonaldTrump) November 1, 2019
The number was later broken down by the president’s Council of Economic Advisors, which first told a Washington Post reporter that a series of adjustments — including upward revisions to the previous months — added 175,000 jobs to the October number.
“We are currently in a working class boom, and the best way to help the working class is not really by government handouts but increasing demand for their labor—and that's exactly whats taking place,” Acting CEA chair Tomas J. Philipson told Yahoo Finance on Friday, who agreed that the data didn’t really need to be exaggerated.
Highlight: “We are currently in a working class boom, and the best way to help the working class is not really by government handouts but increasing demand for their labor—and that's exactly whats taking place,” Acting CEA Chair Tomas J. Philipson says. https://t.co/Jb7k9twFHf pic.twitter.com/JoBdffOD3X
— Yahoo Finance (@YahooFinance) November 1, 2019
Philipson told Yahoo Finance that the GM work stoppage accounted for 60,000 of the 303,000 figure cited by the president, and that was considered “a conservative estimate.”
That figure is substantially higher than the 46,000 thought to have been affected by the strike and the 42,000 cited by the BLS in the jobs data, but factor in other jobs in GM’s supply chain.
All things considered, Wall Street cheered the jobs data, with major benchmarks soaring during the trading session. The S&P 500 (^GSPC) surged to a new record, while the Dow (^DJI) and Nasdaq (^IXIC) also posted strong gains.
The resilient labor market tamed expectations for a deep economic retrenchment, and bolstered the case for the Federal Reserve taking a more neutral stance on another rate cut. The central bank meted out a 25 basis point cut on Wednesday.
“The upshot is that the three-month average gain is now 175,000, which is easily enough to outpace population growth,” said Michael Pearce, senior US economist at Capital Economics. “That is in stark contrast with much of the recent survey evidence, which had pointed to a sharp slowdown in employment growth.”
Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek