Keeping you up to date on the latest data releases.
- The Employment Situation
Nonfarm payrolls rose by 171,000 in October, outperforming even the most optimistic guess (168,000) by professional forecasters in the Bloomberg survey, and coming on the heels of relatively sharp upward revisions to the previous two months’ estimates. Nonfarm payrolls were revised up in sum by 84,000 over the past two months (61,000 of that was to private payrolls). These revisions helped push the average monthly gain in payrolls during the third quarter up to 174,000, compared to just 67,000 in the second quarter (which looks even more like transitory weakness given today’s report). Notably, nonfarm payrolls have averaged a gain of 162,000 per month over the past 12 months, compared to its pre-recession long-run (30-year) average of roughly 150,000. That comparison is perhaps even a little more favorable for private payrolls (164,000 per month. over the past 12 months, compared to a pre-recession long-run average gain of 130,000). Payroll gains were concentrated in the private service sector, accounting for 163,000 of the overall gain. Employment gains were strongest in professional and business services (up 51,000), retail trade (up 36,000), and healthcare (up 30,000). Goods-producing payrolls rose 21,000 in October, almost reversing a decline of 27,000 over the past two months. And government payrolls, which were revised up by 23,000 over the past two months, slipped down 13,000 in October. On the household side of the report, the number of employed persons increased by 410,000 in October, absorbing most of the net inflows into the labor force (up 578,000). However, that excess inflow into the labor force nudged the unemployment rate up to 7.9 percent. The labor force participation rate rose 0.2 percentage points to 63.8 percent, though that’s still 0.3 tenths below its level from a year ago. And the employment-to-population ratio edged up a tenth to 58.8 percent, and has risen by 0.5 percentage points over the past two months.