U.S. employers added 250,000 jobs in October, soaring past expectations

Adjust Comment Print

US companies added 227,000 jobs in October, according to a private survey, a healthy gain that suggests businesses can still find workers even with the unemployment rate striking 49-year lows.

U.S. employers added more nonfarm payrolls than expected in October and the unemployment rate held at its lowest level since 1969, according to the jobs report released Friday. The rate slightly decreased to 7.4 percent in October when counting people who sought a job in the past year and also those with part-time jobs in want of a full-time one.

For a US economic expansion now in its 10th year, hiring remains robust, growth has picked up and the outlook is a mostly bright one on the eve of congressional elections.

Strength in their customer demand has been a key factor leading companies to steadily add workers.

The October data, while strong across the board, may be less of an indicator of the trend than usual because payrolls and wages both reflected temporary boosts from hurricanes this year and last year. Wages grew by 3.1% in October, the best since April 2009.

The jobs report should bolster the Trump administration's talking point on the economy ahead of next week's midterm elections and cement expectations that the Federal Reserve will raise interest rates at its meeting in December. According to estimates by Shipley of Evercore ISI, the replacement of retiring baby boomers, who likely were in their peak earnings years, with lower-paid, younger workers is depressing the annual rise in average hourly earnings by some 0.6 percentage point.

People wait in line at a stand during the Executive Branch Job Fair hosted by the Conservative Partnership Institute at the Dirksen Senate Office Building in Washington, US, June 15, 2018.

The result was something of a surprise as some economists had expected the hurricane that made landfall on the Florida panhandle in the middle of the employment survey week to depress reports of hiring and worker pay. Education and health services saw the largest overall employment increase, with this industry adding 46,700 jobs last month. Polls have suggested that while Americans generally approve of the economy's performance, that sentiment hasn't necessarily broadened support for President Donald Trump or Republican congressional candidates. In October, employment in manufacturing increased by 32,000 with durable goods factories seeing a strong bump.

More news: Death toll in Italy storms rises to nine
More news: Meghan and Harry given traditional Maori greeting in New Zealand
More news: Global Growth In Billionaires Led By China

Retail payrolls probably remained weak, weighed down by layoffs related to Steinhoff's Mattress Firm bankruptcy as well as some store closures by Sears Holdings Corp.

Construction employment rose by 30,000 in October, with almost half of the gain occurring among residential specialty trade contractors.

Hiring spanned all sectors. Businesses as big as Amazon often have margins that allow them to raise pay without blowing up prices, some economists say. Americans increased their spending by 4 percent in the July-September quarter, the biggest acceleration in almost four years.

The labor force participation rate also ticked up in October to 62.9%, a 0.2% increase from September.

There are signs that pay growth is picking up.

There is some concern that higher wages might fuel inflation if companies turn around and increase prices for consumers. But economists said it's still encouraging, as the pay increase remains well above the inflation rate, meaning that workers' pay is actually raising their standard of living.

Average hourly earnings rose five cents, or 0.2 percent, in October after advancing 0.3 percent in September.

Comments