November 3, 2017 – The Employment Situation gives the most comprehensive look at the labor market in the U.S. This report tracks new jobs, additions or subtractions from the labor force, the unemployment rate, as well as average hourly earnings and hours worked. There are implications for consumer purchasing power, spending on goods and services, and productivity.
The labor market came in at 261,000, substantially higher than September’s upwardly revised to 18,000, but falling short of a consensus of +325,000. Food services and drinking places employment rose 89,000 compared to a decrease of 98,000 in September. Employment for professional & business services increased 50,000 while manufacturing also provided a gain of 24,000 in October. Unemployment fell 0.1% to 4.1%, beating expectations of no movement. The participation rate dipped slightly to 62.7% in October. The average workweek stayed steady at 34.4 hours, right in line with expectations. Average hourly earnings came in unchanged, but lowered to 2.4% year-over-year in October.
October’s employment numbers show the highest employment numbers since July of 2016. The employment report carries an impact on the economy with it. When employment is high it tends to lead to higher economic activity and opposite when employment is low. By breaking down employment by industry, this allows investors to gain an insight about which sectors are growing and which ones are decreasing. It also provides insight on wages and which way wage inflation in heading. Wage inflation is high on the Fed’s list of components to track to adjust monetary policy.