Sunday, November 6, 2016

October jobs report continues moderate, steady growth

As the election season nears its end, we had October's US jobs report come out on Friday. And it wasn't a huge change from the slower-but-still-positive trend of growth we've seen in 2016.
Total nonfarm payroll employment rose by 161,000 in October. Thus far in 2016, employment growth has averaged 181,000 per month, compared with an average monthly increase of 229,000 in 2015. In October, employment continued to trend up in health care, professional and business services, and financial activities. (See table B-1.) ...

The change in total nonfarm payroll employment for August was revised up from +167,000 to +176,000, and the change for September was revised up from +156,000 to +191,000. With these revisions, employment gains in August and September combined were 44,000 more than previously reported. Over the past 3 months, job gains have averaged 176,000 per month.
So if you add in the 44,000 in positive revisions, that 161,000 increase goes to 205,000, which is a pretty good improvement from where we thought we were. The unemployment rate also dipped back below 5.0%, to 4.9% in October (technically going from 4.97% to 4.88%), and while that reflects seasonally-adjusted drops in both labor force and the unemployed, it levels out huge increases in the labor force and "employed" in September. That leaves us with a 2-month total of +311,000 for employed, and +269,000 in the labor force, so that's a legitimately low rate.

The other big story in the jobs report was an impressive increase in wages.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in October. In manufacturing, the workweek edged up by 0.1 hour to 40.8 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. (See tables B-2 and B-7.)

In October, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $25.92, following an 8-cent increase in September. Over the year, average hourly earnings have risen by 2.8 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.72 in October.
That's pretty good, as higher wages is certainly something that is needed, particularly after the drop in Consumption growth that we saw in the previous week's GDP report for the 3rd Quarter. The average weekly earnings growth in the private sector isn't as high (up 2.5%) because of a slightly lower workweek, but it's still above the rate of inflation, and should be decent enough to continue to have the economy grow going forward.

If you break down jobs into sectors, those also seem to have patterns repeating. Over 39,000 jobs were added in October in health care/social assistance, and nearly 20,000 gained in administrative/support services. Both of these areas also have had big gains over the last 12 months, as health care has added over a half-million jobs, and administrative/support is up over 194,000.

But on the down side, mining and logging continues to fall as oil prices stay low, losing 2,000 jobs last month and 108,000 in the last year. Also, manufacturing employment continued to decline, losing 9,000 jobs in October, 17,000 in the lat 2 months, and 88,000 over the last year. The economic concerns that the average non-college educated male that are in these jobs are legitimate- after a brief runup a few years back, those sectors are back in the decline that plagued much of these sectors throughout the 2000s, and it is understandable that they are upset with the status quo, and possibly turn them toward a strongman who would "blow things up", ;like Donald Trump (however, the racism and sexism that is shown in Trump support is not part of this "economic anxiety." And while those two items should not be connected, they far too often are).

But those losses are contained largely to those heavy industries, as the rest of the economy continued to add jobs across most sectors. Much as it has done for the last 6 1/2 years under President Obama, and make no mistake, we are in a better spot than where we were when Obama was elected 8 years ago. Don't believe me- take a look at these figures.

Private sector jobs, US
October 2008 change -485,000
October 2016 change +142,000

Oct 2007-Oct 2008 change -2.145 million
Oct 2015-Oct 2016 change +2.149 million

Total private sector jobs 2008 113.759 million
Total private sector jobs 2016 122.717 million (+8.958 million)

Which is why this Tweet from last week was such a massive fail for our Fair Governor.

Our economy may not be perfect, but I'll definitely take it over a return to trickle-down failure in both DC and in the state. Vote accordingly, folks.

1 comment:

  1. Just a reminder Jake, in President Reagan's finale Oct in office there were 325,000 jobs created. Now go cry in your beer and tell everyone Trump got elected cuz America is a racist nation.