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U.S. Employment: October Gains Wipe Out Bad September

Excellent October numbers from the U.S. Bureau of Labor Statistics indicate that, while the U.S. economy isn't yet operating at full steam, it is moving closer to what's needed for sustained economic growth.

The first Friday of the month is here again, and it brings with it the jobs report for the preceding month from the U.S Bureau of Labor Statistics. Whereas last month’s report came off somewhat gloomy and dismal, this one’s got some rainbows around it, and shows some glimmers of promise for economic growth.

 

Ed T Figure 1 11 03 2017

 

For starters, the unemployment rate is down to 4.1 percent. The last time such a paltry percentage of people were out of work was in December 2000, prior to the dot-com bust and Sept. 11. In fact, this rate is the lowest of any reported in the last decade (2007 through 2017). In addition, numbers for August and September were both revised upward by an aggregate of 90,000 jobs.

 

August’s lackadaisical 169,000 was restated at a more brisk and typical 208,000. September’s absolutely awful loss of 33,000 jobs (thanks mostly to hurricanes Harvey and Irma, according to most labor economists) turned into a miniscule, but still positive, gain of 18,000 jobs.

 

Interestingly, low unemployment and decent levels of job growth haven’t yet translated into appreciable wage growth. In fact, wages actually declined by one cent an hour for October. That puts average hourly earnings for all employees on private nonfarm payrolls at $26.53.

 

For the past 12-month period, while wage growth has managed to outpace inflation (which stands at 2.2 percent for the period from October 2016 through September 2017), it is not exactly cracking along at only 2.4 percent. The miniscule 0.2 percent difference doesn’t put enough added income into workers’ pockets for them to notice much, if any, improvement.

 

As expected, employment in food services and drinking places jumped sharply in October, with 89,000 jobs added. This reverses most of the drop of 98,000 for September, when so many workers were idled by the big storms and their aftermaths. Professional and business services continues their steady growth, with 50,000 jobs added for the month.

 

The following two sectors also experienced modest but noteworthy gains: manufacturing (+24,000) and health care (+22,000). Other sectors — including our home sector, Information — were more or less flat for October.