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U.S. Added 250,000 Jobs in October; Unemployment at 3.7% U.S. Added 250,000 Jobs in October; Unemployment at 3.7%
(about 5 hours later)
The Labor Department released its hiring and unemployment figures for October on Friday morning, providing the latest snapshot of the American economy. The last official snapshot of the economy before Americans vote on Tuesday offered another reminder of the labor market’s persistent strength. Hiring is up. Wages are up. The total number of workers and job searchers is up.
■ 250,000 jobs were added last month. “It’s really the strongest part of the broader economy at the moment,” Michelle Girard, chief United States economist at NatWest Markets, said of the labor market.
■ The unemployment rate was unchanged at 3.7 percent, a nearly 50-year low. A swerving stock market, tariffs and weakening growth in other countries may be causing agita, but they have done little to dent economic momentum in the United States. Employers added 250,000 jobs in October, extending a record streak of growth to 97 months, the Labor Department reported on Friday.
■ Average earnings rose by 0.2 percent and are up 3.1 percent over the past year. The economy has historically not played an outsize role in midterm elections, and this political season, border control, health care and Brett Kavanaugh’s nomination to the Supreme Court have gobbled up airtime and political ad space. Still, about three-quarters of registered voters say the economy is “very important” in determining their vote, according to polls conducted by the Pew Research Center. Among Republicans, that number is even higher at 85 percent.
■ The number of people working or looking for a job increased by 711,000, nudging the labor force participation rate up to 62.9 percent, from 62.7 percent in September. “Jobs and the economy” was also cited more frequently than other issues as the most important in a survey conducted in early October for The New York Times by the online research platform SurveyMonkey.
Friday’s report, the last official economic reading before Americans vote on Tuesday, offered another reminder of the labor market’s persistent strength even as the stock market has swerved down in recent weeks. A recent string of reports suggests both are in good shape. Last week, the government estimated that the economy grew at a hearty annualized rate of 3.5 percent in the third quarter. Confidence remains high among consumers and business leaders. Over the past year, employers have added an average of 210,000 jobs a month.
“The underlying fundamentals of the labor market are still really bright,” said Michelle Girard, chief United States economist at NatWest Markets. “It’s really the strongest part of the broader economy at the moment.” Friday’s roundup also offered evidence that sidelined workers are not only feeling optimistic about job prospects but are actually finding work, which is why the jobless rate was unchanged at 3.7 percent even as employers hired more people. An estimated 711,000 people joined the labor force last month. President Trump, on Friday, called the numbers “tremendous.”
The economy has historically not played an outsize role in midterm elections, and this political season, border control, health care and Brett Kavanaugh’s nomination to the Supreme Court have gobbled up airtime. Still, “jobs and the economy” was cited more frequently than other issues as the most important in a survey conducted in early October for The New York Times by the online research platform SurveyMonkey. A modest monthly wage gain of 0.2 percent nonetheless produced a surprisingly big 3.1 percent jump in annual growth. That was partly because of an unusual drop in pay in October last year after hurricanes. Yet even if the year-over-year increase was somewhat inflated, the underlying trends point to a pickup in wage growth.
October marked the 97th consecutive month of job growth, extending an already record-making streak. Average monthly payroll increases have floated around the 210,000 mark over the past year. Last week, the government estimated that the economy grew at a hearty annualized rate of 3.5 percent in the third quarter. Confidence remains high among consumers and business leaders. Some analysts saw warnings of inflation, but others said the pay increase should not bother policymakers at the Federal Reserve. “I don’t think it’s something the Fed should worry about,” Ms. Girard said. “Productivity growth is picking up, and workers should earn more. It doesn’t mean companies have to pass on higher wage costs to consumers. They can afford to pay them more.”
The report also offered evidence that sidelined workers are not only feeling optimistic about their job prospects but are actually finding work, which is why the jobless rate did not dip despite the big payroll gains.
[Read more: The October employment numbers feature everything you might hope for. Three questions will determine how long the heights can be maintained.]
On a year-over-year basis, wages jumped partly because there was an unusual drop in pay in October last year after hurricanes. But Ms. Girard pointed out that even if that figure was somewhat inflated, “there is an upward trend and evidence in the wage numbers which suggest we’re finally seeing some pickup in wage growth.”
Although some analysts warned of inflation, Ms. Girard said the pay increase should not bother policymakers at the Federal Reserve. “I don’t think it’s something the Fed should worry about,” she said. “Productivity growth is picking up, and workers should earn more. It doesn’t mean companies have to pass on higher wage costs to consumers. They can afford to pay them more.”
The Fed, which has increased rates three times this year from historically low levels, is expected to raise them again to 2.5 percent in December as a hedge against inflation.The Fed, which has increased rates three times this year from historically low levels, is expected to raise them again to 2.5 percent in December as a hedge against inflation.
The monthly jobs report always captures only a brief moment in time; the underlying trend is what’s important. That caution is particularly pertinent this month. The back-to-back hurricanes in September and October may have distorted the figures in unpredictable ways. “It looks good, but it’s never happened before when you have hurricanes making landfall in successive survey weeks,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Mr. Trump has called the Fed “loco” and “out of control” for raising interest rates, and blamed it for the recent drop in stock prices and for potentially derailing the economy.
Manufacturing jobs — which have traditionally paid well and have been a focus of President Trump’s economic policies — increased by a healthy 32,000. Here, again, Mr. Shepherdson advised wariness, noting that the Institute for Supply Management reported this week that its manufacturing index had fallen to a six-month low amid worries of tariffs, shortages and a drop in global demand. In a call with reporters, Kevin Hassett, the chairman of the president’s Council of Economic Advisers, cited productivity growth as the explanation for higher wages, and not an overheating economy. He also took the opportunity to say that the president respects the Fed’s independence.
“If I were a Republican politician, I would be shouting about it,” Mr. Shepherdson said, “but there’s no way that growth is going to continue.” Manufacturing sectors in China, in particular, and Europe are weakening sharply, he said. The commentary accompanying the release of the manufacturing index this week, he said, was “tariffs, tariffs, tariffs.” As always, the monthly jobs report captures only a particular moment; the underlying trend is what’s important. That caution is particularly pertinent this time.
The back-to-back hurricanes in September and October may have distorted the data in unpredictable ways. “It looks good, but it’s never happened before when you have hurricanes making landfall in successive survey weeks,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Manufacturing jobs — which have traditionally paid well and have been a focus of Mr. Trump’s policies — increased by a healthy 32,000.
Here, too, Mr. Shepherdson advised skepticism, noting that the Institute for Supply Management reported this week that its manufacturing index had fallen to a six-month low amid worries about tariffs, shortages of parts and a drop in global demand.
“If I were a Republican politician, I would be shouting about it,” Mr. Shepherdson said, referring to manufacturing. “But there’s no way that growth is going to continue.” Manufacturing sectors in China, in particular, and Europe are weakening sharply. Producers, he said, are worried about “tariffs, tariffs, tariffs.”
October’s figures will be revised twice more, and September’s once more.October’s figures will be revised twice more, and September’s once more.
Although the unemployment rate has consistently surfed below the levels reached in 2000, at the height of that expansion, wages have been growing at significantly slower rates.Although the unemployment rate has consistently surfed below the levels reached in 2000, at the height of that expansion, wages have been growing at significantly slower rates.
Low wages in many sectors have contributed to financial instability. More than a quarter of Americans don’t earn enough to cover basic expenses, while more than a third are unable to pay all their bills on time, according to a report released Thursday by the Center for Financial Services Innovation, a nonprofit funded by foundations and several banks. That shortfall has contributed to mounting credit card debt and loan defaults. Low wages in many sectors have contributed to financial instability. More than a quarter of Americans don’t earn enough to cover basic expenses, while more than a third are unable to pay all their bills on time, according to a report released Thursday by the Center for Financial Services Innovation, which is funded by nonprofit foundations and several banks. That shortfall has contributed to mounting credit card debt and loan defaults.
October’s report, however, is among several recent signs that wage growth is picking up. October’s report, however, is among several recent signs that wage growth is gathering steam.
According to a report last week from the research arm of the payroll processing firm ADP, for instance, American workers are earning nearly $1 more per hour on average than they were a year ago. According to a report last week from the research arm of the payroll processing firm ADP, American workers are earning nearly $1 more per hour on average than they were a year ago.
William H. Stoller, chairman and chief executive of Express Employment Professionals, which is based in Oklahoma City, said pay in light industrial and administrative jobs, for example, had climbed to $14.50 to $15.50 an hour, from roughly $13.60 a year ago. Most job applicants whom his firm encounters are looking for higher pay and more opportunities to advance. Protolabs, a digital manufacturing company based in Minnesota, hired 50 people last month, bringing the year’s total to 340, a pace it expects to match in 2019, said Renee Conklin, vice president for human resources. But the competition for workers is becoming stiffer. “We’re seeing more employers making counteroffers to retain people,” Ms. Conklin said.
“What’s so impressive to me is there have been more jobs than workers every month since March of this year,” said Scott Clemons, chief investment strategist at Brown Brothers Harriman. Openings exceeded 7.1 million, according to the government’s most recent count. Since the recession ended, analysts have struggled to understand how many more potential workers are out there. Before the financial crisis, more than 66 percent of the population 16 or older was working or looking for a job. In recent years, that number — the labor-force participation rate — has rarely risen above 63 percent.
Since the recession ended, analysts have struggled to understand how many more potential workers are out there. Before the financial crisis, more than 66 percent of the population 16 or older was working or looking for a job. In recent years, that rate has rarely risen above 63 percent. Many of those missing workers will never rejoin the labor force — some have reached retirement age, others have seen their skills lose value, and a number are too disabled to work.
Many of those workers will never rejoin the labor force — some have reached retirement age, others have seen their skills lose value, and a number are too disabled to work. Economists have had a spirited debate over how many more people could be lured back to the labor market. The relatively languid pace of wage growth indicates that there are still people on the sidelines who would be willing to take jobs if it seemed worth while. Economists continue to argue about how many more people could be lured back to the labor market. Rising wages are certainly one attraction.
The bump up in October’s participation rate provides some evidence that this is the case. “I think we’re bringing more people into the labor force,” said Scott Anderson, chief economist at Bank of the West. Women are coming back into the work force at a much faster rate than men, however. And over the past year, a net total of 1.4 million women have joined compared with 845,000 men. Drawing in even more women would require better child care, paid parental leave and more flexible hours, said Betsey Stevenson, an economist at the University of Michigan. “We know what to do for women,” she said. “We’re really at a loss as to what to do to induce more men back.”
Women are coming back into the work force at a much faster rate than men, the report showed. Over the past year, a net total of 1.4 million women have joined the labor force compared to 845,000 men. Job opportunities are also rippling out to groups that were largely bypassed during much of the recovery: African-Americans, Hispanics, less-educated workers and people with disabilities have all seen their unemployment rates drop in recent months.
Employers say they are constantly on the hunt for workers. “I speak to probably a thousand businesspeople a month,” said Rick Lazio, a former Republican congressman who is now a senior vice president at Alliantgroup, a tax-credit consulting firm. Midsize manufacturers are turning down lots of business, he said, “because they can’t find the people and they can’t get the equipment fast enough.” Employers say they are constantly on the hunt for workers. “I speak to probably a thousand businesspeople a month,” said Rick Lazio, a former Republican congressman who is a senior vice president at Alliantgroup, a tax-credit consulting firm. Midsize manufacturers are turning down lots of business, he said, “because they can’t find the people and they can’t get the equipment fast enough.”
Help is not coming from abroad: The number of immigrant visas issued by the government has declined for two years in a row.Help is not coming from abroad: The number of immigrant visas issued by the government has declined for two years in a row.
Worries about fierce competition for holiday hiring have prompted employers to be more aggressive, putting offers out earlier than usual and raising wages, recruiters said. The global outplacement and executive coaching firm Challenger, Gray & Christmas, which tracks hiring announcements, has reported that companies are looking to add 700,000 seasonal workers, the largest number since 2014. Worries about fierce competition for holiday hiring have prompted employers to be more aggressive, putting offers out earlier than usual and raising wages, recruiters said.
United Parcel Service has said it plans to hire 100,000 people for the holidays. Several applicants for packing or delivery positions who showed up at the company’s hulking customer center in Manhattan during a recent nationwide hiring drive said they hoped temporary stints would turn into permanent jobs. A company spokesman said that seasonal positions paid $10.35 to $30 an hour, depending on the location. United Parcel Service has said it plans to hire 100,000 seasonal workers. Several applicants for packing or delivery positions who showed up at the company’s hulking customer center in Manhattan during a recent nationwide hiring drive said they hoped temporary stints would turn into permanent jobs. A company spokesman said holiday positions paid $10.35 to $30 an hour, depending on the location.
“I’m just praying,” said Chanique Cox, 42, knocking her knuckles on a wooden counter and clicking her blue nails. “I’m only finding temporary jobs. I would love it if I got a permanent job.” “I’m just praying,” said Chanique Cox, 42, who did not finish high school. She knocked her knuckles on a wooden counter and clicked her blue nails. “I’m only finding temporary jobs. I would love it if I got a permanent job.”
Ms. Cox, who did not finish high school, said that nearly all the jobs she had pursued required an online application, and that she never heard back about why she was not selected.
Job opportunities have finally begun rippling out to groups that were largely bypassed during much of the recovery: African-Americans, Hispanics, less-educated workers and people with disabilities have all seen their unemployment rates drop in recent months.