Consider this the first of two gifts Donald Trump got this morning for next week’s midterm elections. The booming US economy added 250,000 jobs in October, well above expectations and a big jump from September’s revised sub-maintenance level of 118,000. Perhaps more importantly, wages jumped upward at the best pace since the start of the recovery in 2009:
Total nonfarm payroll employment rose by 250,000 in October, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, in construction, and in transportation and warehousing.
The unemployment rate remained at 3.7 percent in October, and the number of unemployed persons was little changed at 6.1 million. Over the year, the unemployment rate and the number of unemployed persons declined by 0.4 percentage point and 449,000, respectively. …
The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.5 hours in October. In manufacturing, the workweek edged down by 0.1 hour to 40.8 hours, and overtime was unchanged at 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls, at 33.7 hours, was unchanged over the month.
In October, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $27.30. Over the year, average hourly earnings have increased by 83 cents, or 3.1 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $22.89 in October
The increase in wages comes from pressure created by what now looks like full employment. The less-than-stable Household survey showed 711,000 people coming into the workforce last month, exceeding the drop of 487,000 in the not-in-labor-force number from last month. Those numbers have been sketchy on a month-to-month basis, but the employment-population ratio has risen significantly over the past year:
The labor force participation rate increased by 0.2 percentage point to 62.9 percent in October but has shown little change over the year. The employment-population ratio edged up by 0.2 percentage point to 60.6 percent in October and has increased by 0.4 percentage point over the year.
The Wall Street Journal celebrates the big win on both wages and jobs:
Hiring accelerated in October and the unemployment rate held at a 49-year low, signs of a strengthening labor market that delivered U.S. workers the best pay raises in nearly a decade.
U.S. nonfarm payrolls increased a seasonally adjusted 250,000 in October, the Labor Department said Friday. The unemployment rate held steady at 3.7% in October, matching lowest rate since December 1969. Wages increased last month and advanced 3.1% from a year earlier, the best year-over-year gain for average hourly earnings since 2009.
Economists surveyed by the Wall Street Journal had expected 188,000 new jobs in October and a 3.7% unemployment rate.
The normal revisions in the report canceled each other out. BLS revised August’s numbers upward by 16,000 to 286,000, and they lowered September’s reported additions by 16,000 as well. The three-month rolling average is 218,000 jobs added per month, a substantial if not blockbuster level of job creation. As Jazz noted on Twitter, we’re still not seeing a sustained expansion at the 300K+ level, but we’re not in the high 100s, either.
The big news here, though, is wage growth. The AP’s Christopher Rugaber notes that it’s fueling consumer confidence, making economic growth even more dynamic:
The influx of new job-seekers in October increased the proportion of Americans with jobs to its highest level since January 2009.
Consumers are the most confident they have been in 18 years and are spending freely and propelling brisk economic growth. The U.S. economy is in its 10th year of expansion, the second-longest such period on record, and October marked the 100th straight month of hiring, a record streak.
The resulting strength in customer demand has led companies to steadily add workers. Though economists predict that hiring will eventually slow as the pool of unemployed Americans dwindles, there’s no sign of that happening yet. …
In the July-September quarter, consumer spending grew by the most in four years and helped the economy expand at a 3.5 percent annual rate. That growth followed a 4.2 percent annual pace in the April-June quarter. Combined, the two quarters produced the strongest six-month stretch of growth in four years.
Heck, even this guy’s impressed:
Pretty much everything you could want in a monthly jobs report. Payroll gains way better than expected, nice pop in labor force participation, wage growth continues to strengthen, finally beating inflation (real gains!). Score 1 for “room-to-run” crowd!
— Jared Bernstein (@econjared) November 2, 2018
In case you don’t recognize the name, that’s Joe Biden’s former economic adviser.
That’s the story that Republicans have to tell in the final days of the midterms. Donald Trump got elected by promising voters that the economy could do much better than the slow stasis of the recovery in the Obama years, and he’s been proven correct. American workers are seeing the first real gains in wages in a decade, and perhaps even longer than that. Almost any other issue at this point is a distraction from the Trump administration’s best argument for staying the course under full Republican control. Let’s see how well the White House and the GOP use this gift.
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