US nonfarm payroll employment increased by 214,000 in October, and the unemployment rate edged down to 5.8%. Employment rose in food services and drinking places, retail trade, and health care while the jobless rate fell to a 6-year low.
Incorporating revisions for August and September, which increased total nonfarm payroll employment by 31,000, monthly job increases have averaged 224,000 over the past 3 months. In the 12 months prior to October, employment growth averaged 222,000 per month.
The broad measure of unemployment, which includes part-timers who want full-time work and discouraged workers who have withdrawn from the labour force, fell sharply last month to the lowest level since September 2008, when the US was in a severe recession. The so-called U-6 rate stood at 11.5% in October, down from 11.8% in September and 13.7% a year earlier.
In the service-providing sector, food services and drinking places added 42,000 jobs in October, compared with an average monthly gain of 26,000 over the prior 12 months.
Employment in retail trade increased by 27,000 in October. Job gains occurred in general merchandise stores (+12,000) and automobile dealers (+4,000).
Health care employment grew by 25,000 in October, following a similar-sized increase in September. Over the year, health care has added 257,000 jobs. Within the industry, ambulatory health care contributed 19,000 to the over-the-month job growth.
Employment in professional and business services continued to trend up over the month (+37,000). Over the prior 12 months, job gains in the industry averaged 56,000 per month. In October, employment continued on an upward trend in temporary help services and in computer systems design and related services (+15,000 and +7,000, respectively).
Employment in transportation and warehousing also continued to trend up in October (+13,000).
Turning to the goods-producing sector, manufacturing employment continued trending up in October (+15,000), with over-the-month gains occurring in machinery (+5,000), furniture and related products (+4,000), and semiconductors and electronic components (+2,000).
Construction employment also continued on an upward trend in October (+12,000). Within the industry, employment among residential specialty trade contractors edged up by 10,000. Over the year, construction has gained 231,000 jobs.
Average hourly earnings of all employees on private nonfarm payrolls rose by 3 cents to $24.57 in October. Over the 12 months ending in October, average hourly earnings grew by 2.0%. From September 2013 to September 2014, the Consumer Price Index for All Urban Consumers (CPI-U) increased by 1.7%.
Turning to measures from the survey of households, the unemployment rate edged down to 5.8% in October. Since the beginning of the year, the jobless rate is down by 0.8 percentage point.
In October, the number of unemployed persons edged down to 9.0m. The number of long-term unemployed (those unemployed 27 weeks or more) was little changed over the month, at 2.9m.
The labour force participation rate was 62.8% in October and has been essentially flat since April. The employment-population ratio rose in October to 59.2%.
In October, the number of people working part time for economic reasons was 7.0m, about unchanged over the month. (These individuals, also referred to as involuntary part- time workers, would have preferred full-time employment, but had their hours cut or were unable to find full-time work.)
Among people who were neither working nor looking for work in October, 2.2m were classified as marginally attached to the labour force, little changed over the year. (These individuals had not looked for work in the 4 weeks prior to the survey but wanted a job, were available for work, and had looked for a job within the last 12 months.) The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 770,000 in October, also little changed over the year.
Dan Greenhaus of the US brokerage BTIG commented: "A 214,000 reading for headline job creation is certainly disappointing although mitigated somewhat by a 31,000 upward revision to previous months. At the same time, we shouldn’t lose sight of the fact that total monthly job creation has topped 200,000 in nine consecutive months, a development we haven’t seen since 1995….As for other metrics people care about, there was a very large jump in the size of the labor force which pushed up the participation rate by 0.1 percentage point. Further, the unemployment rate declined but did so for ‘good’ reasons; the level of employment rose by a whopping 683,000 while the level of unemployment declined by 267,000. People can debate the validity of the unemployment rate and the message it’s sending but at least in October, the drop was unquestionably a good thing.”
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