Economy adds 261K jobs in October
by admin · Published · Updated
U.S. jobs posted a big rebound in October after the effects of severe weather that battered the economy in the late summer faded.
Employers added 261,000 jobs last month, and the unemployment rate fell to 4.1 percent, the lowest level since December of 2000 when it was 3.9 percent, the Labor Department reported on Friday.
While robust, job growth fell short of economists’ expectations of about 315,000 new jobs.
“Beneath the surface of the ups and downs in the monthly hiring numbers, the U.S. economy is faring well by most measures,” said Mark Hamrick, senior economist analyst at Bankrate.com.
“There’s a good chance that we’ll string together three straight quarters of growth of 3 percent or better, including this final quarter of the year,” Hamrick said.
Jobs for September, which had first shown the first monthly job losses since 2010, were revised up to 18,000.
In August, employers hired 208,000 workers, up from the initial estimate of 169,000.
“However, the unemployment rate fell because of fewer people in the labor force,” said Gus Faucher, PNC’s chief economist.
The labor force participation rate dropped by 0.4 percentage point to 62.7 percent in October.
Hiring last month reflected the post-storm rebound but economists have cautioned that the jobs number could be heavily skewed because of Hurricanes Harvey and Irma coupled with the devastating wildfires that swept across northern California.
Over the past three months, hiring has averaged 162,000, which is only slightly below the 168,000 recorded so far this year.
Jobs lost at bars and restaurants, which were hit the hardest by the hurricanes, were largely recouped last month.
Those employment numbers rose 89,000 after a loss of 98,000 jobs in September following the storms.
House Ways and Means Committee Chairman Kevin Brady (R-Texas), whose state was hit hard by Hurricane Harvey said he was pleased to see more jobs added this month.
“[It is] a clear sign communities in Texas and Florida are recovering after the devastating hurricanes earlier this year,” Brady said.
The household survey, which is an estimate of employed Americans, not of total jobs, showed that 484,000 fewer people were employed last month after a sharp rise of 906,000 in September.
Analyzing those losses and gains, Betsey Stevenson, an economist at the University of Michigan, said it reflects the creation of 112,000 jobs in September and 196,000 in October, which is within the range of average jobs growth in the labor market.
Economists say that the labor market is adding between 150,000 and 200,000 jobs a month, a number that is enough to lower the unemployment rate.
But wages for workers remained frustratingly stagnant with average hourly earnings falling a penny last month after rising 12 cents in September.
“The one major disappointment in the jobs report was a slight decline in average hourly earnings, although this was likely impacted by the recovery from the hurricanes, with leisure and hospitality jobs having a somewhat lower wage rate on average than the overall economy,” said David Berson, chief economist at Nationwide.
In the past year, wages have increased only 2.4 percent, a sharp drop from the 2.9 percent a month ago although the figure is probably distorted because of the effects of the hurricanes.
“With the swings from the hurricanes now largely behind us, the longer-term challenge of wage growth returns to the foreground,” said Jed Kolko, chief economist at Indeed.
House Democratic Leader Nancy Pelosi said the October report “shows that hard-working Americans continue to be denied the bigger paychecks they deserve under the Republicans’ billionaires-first agenda.”
“Ten months into the Trump administration, working Americans still aren’t seeing the strong wages that Republicans have promised them,” Pelosi said.
The report also showed that manufacturing, which has added 156,000 jobs since a recent employment low in November 2016, rose by 24,000 in October.
Construction, which is expected to pick up the pace with post-storm rebuilding, posted job gains of 11,000, the same as September.
Still, Americans are more confident than they have been in 17 years, according to a recent Conference Board survey.
Overall, the economy seemed to weather the storms mostly unscathed, showing 3 percent annual growth in the July-September quarter, completing the best two-quarter performance in three years.