One month ahead of the December meeting of the Federal Reserve and just four days before the U.S. presidential election, the employment report for October looked stable. Though the jobs report came in just below expectations, it held steady adding 161,000 nonfarm roles, according to the October Employment Situation released by the U.S. Bureau of Labor Statistics. The unemployment rate remained at 4.9 percent, a level it has maintained for more than 12 months.
Healthy start for the fourth quarter
Following a revised growth of 191,000 jobs for the month of September, the economy looks strong heading into the final quarter of the year, according to The New York Times. Though the unemployment rate remained relatively unchanged in October, it did drop one-tenth of a percentage point, according to the BLS. Also notable was average hourly earnings, climbing 10 cents in October and 8 cents the month previous to increase 2.8 percent year over year. It has been more than eight years since that level of growth was achieved, noted The New York Times.
September was not the only jobs report that was revised. Figures for August were also modified, bringing the average employment growth over the last three months to 176,000.
Leading the charge and keeping up with demand
Adding the most jobs in October were the healthcare, professional and business services, and financial activities sectors. Overall healthcare added 31,000 jobs, with growth in ambulatory healthcare services which added 19,000 jobs, and hospitals which added 13,000 roles. Not far behind was the professional and business services sector. The BLS reported that 43,000 positions were created, predominantly in computer systems design and related services, and in management and technical consulting services. The two sectors added 8,000 and 5,000 jobs, respectively. The financial activities sector continued its positive growth trend, adding 14,000 jobs overall and 8,000 among insurance carriers and related activities.
Job growth in other industries including mining, construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, leisure and hospitality, and government were relatively unchanged over the month.
The need for skilled workers still remains. According to Bloomberg, figures from an Institute for Supply Management survey indicated that among the service-industry job market, hiring managers have had difficulty finding qualified employees for more than a year now. Work in this sector accounts for nearly 90 percent of the economy.
“As [the pool of talent] continues to tighten up, firms are going to have to resort more and more to more attractive pay to draw people in,” Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York, told Bloomberg prior to the Friday morning release of the report. “We’re pretty close to full employment.”
The bigger picture
According to The Wall Street Journal, Fed officials have said that the two jobs reports released before its end-of-year meeting, including the one released Friday, are unlikely to sway an interest rate hike decision. Though officials at the meeting this week noted interest in observing stronger economic growth before making a final decision, The Wall Street Journal noted that the recent jobs report would have had to have been quite disappointing to really change any minds.
As for the upcoming election, the October employment situation remains up for interpretation though most analysts do not anticipate any significant impact on the outcome.
“This is right down the middle of the fairway,” Vincent Reinhart, chief economist at Standish Mellon, told The New York Times. “The main message is from the payroll report: Jobs are being created and earnings are going up.”
The full Bureau of Labor Statistics report can be downloaded here.