Unlike other econ areas, US jobs market still going strong

I had mentioned that Friday’s US jobs report would tell us a lot about whether we were heading toward recession in the near future. And if you were worried about whether the expansion was over, your fears can subside for a bit.

The U.S. economy added more jobs than expected in October, handily topping estimates even as a protracted strike was anticipated to weigh on hiring growth.

The unemployment rate held near a 50-year low, and wage increases picked up slightly.

The wage increases weren’t that great (0.2%), but the stock market definitely approved of the added jobs and 3.6% unemployment. The DOW Jones added more than 300 points, as recession fears faded with the jobs market being shown to stay on solid ground.

The 125,000 increase was even more impressive because the United Auto Workers were on strike against GM as the October survey was taking place.

Forty-six thousand workers were counted as part of the strike, according to the BLS strike report last Friday.

However, the strike had less of a dampening effect than expected on the BLS establishment survey, which includes metrics including the change in non-farm payrolls.

“Manufacturing employment decreased by 36,000 in October,” the BLS said in its October report. “Within manufacturing, employment in motor vehicles and parts declined by 42,000, reflecting strike activity.”

And beyond the October increases, previous months that had shown tepid job growth looked quite a bit better after revisions.

The change in total nonfarm payroll employment for August was revised up by 51,000 from +168,000 to +219,000, and the change for September was revised up by 44,000 from +136,000 to +180,000. With these revisions, employment gains in August and September combined were 95,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 176,000 over the last 3 months.

So now the trend for job growth isn’t as bad as it seemed after the last month, and has stopped the slide in job growth that we saw in the first half of this year.

Some of the reduced job growth is to be expected in a time of full employment. In addition, the rise in unemployment was for the “good reason”, as 241,000 of the 325,000 people added to work force found employment. So it’s still a pretty good jobs report that shows the economy is still OK.

Then our president had to needlessly exaggerate it, claiming that we added more than 300,000 jobs last month, and his lackeys pathetically tried to cover for him when asked about by Washington Post econ reporter Heather Long.

I asked the WH about 303,000 figure. Here's what Trump's Council of Economic Advisers said:

October: +128k
Revisions: +95k
Adjusting for GM: +60k
Adjusting for Census: +20k

= +303k https://t.co/2NjPoymNhp

— Heather Long (@byHeatherLong) November 1, 2019

Look Donnie, if you want to count the reduction of some Census jobs last month, then you should also remove the 25,000-worker bump that Census hiring gave in August. And I’m sure Trump won’t be mentioning the effect of Census hiring in early 2020 when people get added in full force for that project. Likewise, if you want to add in UAW workers out on strike, then we should subtract the increase that’ll show up in the November report (which I highly doubt Trump will be doing this time next month).

So now we look ahead to see which side of the economy wins out. Is it the continually growing job market that keeps GDP moving up? Or do we start to see the slowing in consumer spending, incomes, and in manufacturing (including the Institute for Supply Management saying the sector declined for the third straight month in October) bring hiring to a halt?

For now, the jobs report makes me figure that the US as a whole continues on the path of moderate growth as Q4 2019 began, assuming the numbers hold (remember, we’re already on track to have earlier 2019 figures revised down by more than 500,000). But the outlook seems quite unclear, and it feels like some kind of definitive event is needed to get a grip on what might happen for 2020.