The US economy added 261,000 jobs in October, missing economists’ estimates. The unemployment rate fell to 4.1 per cent from 4.2 per cent in the previous month, the lowest level since 2000. The numbers are preliminary and will be revised in coming months.
The rebound in hiring followed the hurricane-induced slump in September when US employers created a revised 18,000 jobs. The Bureau of Labor Statistics initially estimated that the economy lost 33,000 jobs, with jobs at restaurants and bars particularly hard hit, as hurricanes Harvey and Irma kept hundreds of thousands of workers away from work and off payrolls in Florida and Texas.
Revisions to previous job reports showed that employment was 90,000 higher in August and September than previously estimated. Job gains have averaged 162,000 over the past three months, strong enough to keep up with population growth.
People who work part-time but want a full-time position, a measure known as part-time for economic reasons, fell by 369,000 to 4.75 million. The U-6 underemployment rate dropped to 7.9 per cent, the lowest level since December 2006. The measure includes part-time workers who would prefer a full-time position and people who want a job, but are not actively looking.
The labour force participation rate – or the share of adults who are either working or actively looking for work – slipped to 62.7 per cent from 63.1 per cent as the size of the workforce shrank. The tightening labour market, though, should draw idle workers off the sidelines.
Wage growth was disappointing. Average hourly earnings grew 2.4 per cent year-on-year, down from the 2.8 per cent reading in September (the September figure, though, was skewed by storms driving low-wage workers out of the labour market). Wage growth is faster than inflation, but below historical standards.
The average workweek for all workers was unchanged at 34.4 hours.
Professional and business services added 50,000 jobs. The manufacturing sector created 24,000 positions. Economists had expected storm-related hiring. But construction companies created a modest 11,000 jobs, the same as September. Retailers cut 8,300 positions as brick-and-mortar retailers are struggling in the face of competition from online sellers.
The Federal Reserve is expected to raise short-term interest rates by another quarter-point at its final meeting of this year in December. President Donald Trump has nominated Jerome Powell to replace Janet Yellen as Fed chair. If confirmed by the Senate, he is unlikely to change the Fed’s direction for monetary policy.
