Nonfarm payroll employment increased by 116,000 in October and the unemployment rate declined slightly to 5.46%, according to this morning's Bureau of Labor Statistics report on the employment situation. This morning's report revised the figure for the September employment gain downward from 121,000 to 50,000.
The October rise in employment was led by gains in the services industry (57,000), the construction industry (28,000), the transportation and public utilities sector (22,000), and the finance, insurance and real estate sector (18,000).
Manufacturing employment declined by 21,000 in October; but, this was in the face of an aircraft industry strike that removed 26,000 workers from payrolls. So, ignoring the strike, the number of manufacturing jobs actually increased slightly.
During October, production and nonsupervisory workers on private nonfarm payrolls experienced an average workweek increase of 0.2 hours to 34.7 hours, and an average hourly earnings increase of 6 cents to $11.59 per hour.
To get a somewhat longer term perspective on the employment situation, let's take a look at the changes in some of the major parameters over the past year. In the past 12 months, nonfarm payroll employment rose in every month but one. However, the net increase in this measure of the workforce was just 1.8% for the year. Over the past year the unemployment rate dropped slightly from 5.70% to this month's reading of 5.46%. Finally, over the past year, average hourly earnings rose by 3.0% and average weekly earnings rose by 2.4%. This represents no real growth in spendable income because the cost of living [Consumer Price Index] grew at approximately the same rate during this period. So, there are no signs of impending inflation from the labor front.
Nonfarm payroll employment is one of the four indicators that the Commerce Department uses to generate its Composite Index of Coincident Economic Indicators [CEI]. The picture being painted by this indicator is one of steady but painfully slow economic growth.
Byline: Lafferty (MF Merlin)