The October labor market report for the U.S., released Friday morning, suggests modest improvement for the economy at the start of the fourth quarter. Employment rose at a satisfactory pace, with gains spread widely by sector. Although the jobless rate ticked higher, it reversed only one third of the previous month’s fall, and the October increase reflected a jump in participation (such that the employment-to-total-population ratio actually moved up). While wage increases remain meager, job gains are keeping total household income climbing at a pace consistent with decent consumer spending growth (especially because inflation is going through a soft patch, supporting real income).
A few specifics:
– Jobs increased 171,000 in the establishment survey, with upward revisions to the two previous months totaling 84,000. That puts the three-month average at 170,000, a pace generally consistent with (1) a slowly falling unemployment rate; and (2) economic growth at a trend-like or slightly better pace.
– Consensus expected a 125,000 payroll figure, though that number probably would have moved higher in the wake of yesterday’s strong-looking ADP employment survey, to perhaps 150,000. Friday’s report thus represents a modest upside surprise. ....