Jobs report: U.S. economy adds 128,000 jobs in October, unemployment rate rises to 3.6 percent
The U.S. economy added more jobs than expected in October, topping estimates even as a protracted strike was anticipated to weigh on hiring growth.
The unemployment rate held near a 50-year low, and wage increases picked up slightly.
The Bureau of Labor Statistics released its latest print on the U.S. employment situation Friday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus economist expectations compiled by Bloomberg:
Change in non-farm payrolls: +128,000 vs. +85,000 expected and 180,000 in September
Change in manufacturing payrolls: -36,000 vs. -55,000 expected and -5,000 in September
Unemployment rate: 3.6% vs. 3.6% expected and +3.5% in September
Average hourly earnings month-on-month: +0.2% vs. +0.3% expected and 0.0% in September
Average hourly earnings year-on-year: +3.0% vs. +3.0% expected and 3.0% in September
The October jobs report reflected the impact of a 40-day United Auto Workers (UAW) strike against General Motors (GM), which lasted from September 16 through October 26. This extended over the survey weeks for both the BLS establishment and household surveys, which captured the calendar and pay period week, respectively, that included the 12th day of the month.
Forty-six thousand workers were counted as part of the strike, according to the BLS strike report last Friday.
The BLS establishment survey – which includes metrics including the change in non-farm payrolls – was expected to reflect the impact of the strike. Consensus economists anticipated, on net, a loss of 55,000 manufacturing payrolls, steepening sharply from a loss of 2,000 in September.
However, the household survey – which includes the unemployment rate and labor force participation rate – was not as notably impacted, since this portion of the report counts striking workers as only temporarily laid off.
Most economists anticipated private employment gains would have totaled more than 100,000 if not for the strike. The ADP/Moody’s jobs report Wednesday showed private payrolls rose by 125,000 in October, or 15,000 better-than-expected. Due to differences in methodology from the BLS establishment survey, the ADP report typically does not capture the impact of striking workers.
However, notwithstanding the impact of the GM strike, job gains have been trending lower in recent months. This phenomenon had been captured in economic reports ahead of Labor Department’s “official” jobs report Friday.
IHS Markit said in its flash purchasing managers’ index report last week that employment numbers fell at the steepest rate since December 2009 in October, due in part to “more cautious hiring strategies,” the institution said. Challenger Gray on Thursday said job cuts increased between September and October, albeit with the total coming in lower than the number of job cuts in October last year.
The Department of Labor’s weekly initial jobless claims have come in mostly higher-than-expected over the past four weeks, but still held below 220,000 and at a low level relative to recent years. ISM’s September manufacturing and non-manufacturing surveys each posted decreases in their employment indices.
The recent sluggishness in new payroll growth could well be symptomatic of a labor market closing in on capacity, especially with the unemployment rate near multi-decade lows.
In the Federal Reserve’s October Beige Book, or collection of anecdotes across Fed regions, the central bank characterized recent employment trends as rising “slightly amid reports of persistent labor shortages.”
“Labor market tightness across skill levels and occupations was widely cited as a factor restraining hiring,” the Fed said in its report.
Still, the Fed’s latest monetary policy statement released Wednesday continued to characterize the overall labor market as “strong.”
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck