October jobs report falls short of estimates with a 150,000 increase, signaling mixed labor market health.
Nonfarm payrolls up by 150,000; unemployment at 3.9%.
Healthcare jobs increase; manufacturing sees decline.
Average hourly earnings rise modestly to $34.00.
October Labor Market Update
The U.S. labor market displayed a mixed performance in October, with nonfarm payroll employment increasing by 150,000 jobs, falling below pre-report estimates and the average monthly gain of the past year. The unemployment rate held relatively steady at 3.9%, a subtle rise compared to the lows seen earlier in the year, as reported by the U.S. Bureau of Labor Statistics.
Sectoral Shifts in Employment
Healthcare, government, and social assistance sectors experienced job gains, while manufacturing faced a setback, primarily due to strike actions. The healthcare sector consistently added jobs, contributing 58,000 new positions to the economy, aligning with its 12-month trend. Government jobs saw an increase of 51,000, returning to its pre-pandemic levels, with local government positions showing notable growth. Social assistance roles increased by 19,000, slightly below the sector’s yearly average. In contrast, manufacturing jobs declined, with the motor vehicles and parts subsector taking the most significant hit due to strikes.
Worker Demographics and Wages
Unemployment rates among various worker groups such as adult men, women, teenagers, and across different ethnicities remained relatively unchanged. The number of permanent job losses rose, and the long-term unemployed represented 19.8% of the jobless. Average hourly earnings saw a modest increase of 0.2% to $34.00, indicating a 4.1% growth over the past 12 months.
Construction and Hospitality
The construction industry continued its steady rise with a 23,000 increase in jobs, reflecting consistent growth. Meanwhile, leisure and hospitality employment levels stagnated, with a minor increase that pales in comparison to the sector’s 12-month average.
Revision of Past Data and Short-term Forecast
Revisions of previous months’ data resulted in a combined downward correction of 101,000 jobs for August and September. With these adjustments and the current month’s performance, there is a cautiously optimistic outlook for the labor market.
Despite the slower pace, the job growth in multiple sectors suggests an underlying resilience. However, the contraction in manufacturing and stagnant wage growth signal potential caution, implying a near-term outlook that leans slightly bearish, particularly for industries sensitive to consumer spending and manufacturing output.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.