Just the Facts
Five Facts on the October Jobs Report
By No Labels
November 2, 2018 | Blog
On Friday, the Labor Department released its monthly hiring and unemployment figures for the month of October. Here are five facts on the October Jobs Report:
The United States added 250,000 jobs in October, far surpassing economists’ forecasts of 195,000
The impressive job numbers reflect one of the strongest labor markets in recent history. As Michelle Girard, chief U.S. economist at NatWest Markets, stated, “The underlying fundamentals of the labor market are still really bright, it’s really the strongest part of the broader economy at the moment.” The report marks the 97th consecutive month of job growth in the U.S., which extends an already record-making streak.
The unemployment rate held steady at 3.7% in October, keeping it at its lowest level since 1969
In September, the unemployment rate in the U.S. dropped to 3.7%, its lowest since December of 1969, when unemployment was at 3.5%. The strong October jobs report means that this number has stayed steady. The unemployment rate has dropped more than six percentage points from a high of 10% unemployment in October 2009 when the U.S. was in the midst of the Great Recession.
Average hourly earnings rose .2% in October, bringing the year-to-year growth up to 3.1%, the best yearly earnings increase since 2009
The .2% increase brings the average hourly earnings for all private-sector workers to $27.30. In addition, the 3.1% increase is the first time that average annualized hourly wages have eclipsed the 3% mark since the Great Recession. This impressive increase in earnings is consistent with the historically tight labor market. As eligible workers become scarcer, companies are forced to compete for employees, which often means higher wages and better benefits.
The report shows that the economy has largely been able to withstand the political turmoil and trade disputes that have been an area of concern
Over the past several months economists, bankers, and politicians alike have expressed concern over growing trade disputes between the U.S. and several of its key trading partners, including Canada, Mexico, the European Union, and China. While the U.S., Canada, and Mexico were able to reach an agreement on a new version of the North American Free Trade Agreement, dubbed the U.S.-Mexico Trade Agrrement or USMCA , many questions remain as to whether the U.S. and China, the world’s two largest economies, will be able to reconcile their differences. However, despite these concerns, the economy has continued to grow at an impressive rate, with Federal Reserve Chairman Jerome Powell recently stating that the U.S. economy’s outlook was “remarkably positive” and that the country was on the cusp of a “historically rare” era of low unemployment and low inflation.
The October jobs report makes it likely that the Federal Reserve will continue to raise interest rates over the coming months
Central banks use rate hikes to deliberately curb growth in an effort to keep economies stable, prolong growth rates, and limit inflation and periods of economic decline. Federal Reserve Chairman Jerome Powell has already raised rates three times in 2018, most recently raising the benchmark federal funds rate to a range of 2-2.25% on September 26. In a recent speech, Chairman Powell explained the delicate balance the Fed is trying to strike: “Removing accommodation too quickly could needlessly foreshorten the expansion” while “moving too slowly could risk rising inflation and inflation expectations.” Powell stated that his goal is to follow a strategy that “is designed to balance these risks.”