Author: Sean Malady

Quick Facts:

• Total nonfarm payroll employment increased by 150,000 in October.
• The federal unemployment rate increased to 3.9 percent.
• Job gains occurred in health care, government, and social assistance. Employment declined in manufacturing due to strike activity.
• The unemployment rate, at 3.9 percent, and the number of unemployed persons, at 6.5 million, changed little in October.
• Among the unemployed, the number of permanent job losers increased by 164,000 over the month to 1.6 million. The number of persons on temporary layoff changed little at 873,000.

Looking Forward:

• The unemployment rate rose to 3.9%, the highest level since January 2022, against expectations that it would hold steady at 3.8%. Employment as measured in the household survey, which is used to compute the unemployment rate, showed a decline of 348,000 workers, while the rolls of the unemployed rose by 146,000.
• The Fed uses wage data as one component of its inflation watch. The central bank has opted not to raise interest rates at its past two meetings despite inflation running well above its 2% target. Following Friday’s jobs data, markets further reduced the probability of a rate hike in December to just 10%, according to a CME Group gauge.
• From a sector standpoint, healthcare led with 58,000 new jobs. Other leading gainers included government (51,000), construction (23,000), and social assistance (19,000). Leisure and hospitality, which has been a top job gainer, added 19,000 as well.

• Manufacturing posted a loss of 35,000, all but 2,000 of which came because of the auto strikes. Transportation and warehousing saw a decline of 12,000 while information-related industries lost 9,000. 

Source: U.S. Bureau of Labor Statistics

Quick Facts:

• Total nonfarm payroll employment increased by 336,000 in September.
• The federal unemployment rate was even at 3.8 percent.
• Job gains occurred in leisure and hospitality; government; health care; professional, scientific, and technical services; and social assistance.
• The unemployment rate held at 3.8 percent in September, and the number of unemployed persons was essentially unchanged at 6.4 million.
• The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.2 million in September. The long-term unemployed accounted for 19.1% of all unemployed persons.  

Looking Forward:

• In a sign of continued economic stamina, payrolls grew by 336,000 on a seasonally adjusted basis, the Labor Department said on Friday. The increase, almost double economists’ expectations, serves as a confirmation of the labor market’s vitality and the overall hardiness of an economy facing challenges from a variety of forces.
• Federal Reserve policymakers have tried to rein in both wages and prices by pulling up interest rates. Some financial analysts believe that continued resilience in wage gains and job growth could hasten a downturn by prompting the Fed to raise borrowing costs further during its next meeting in early November.
• The report also contained steep upward revisions to job growth earlier this summer. Gains for July and August were revised up by a total of 119,000 jobs to a respective 236,000 and 227,000, the government said, suggesting that the labor market is hotter than it previously appeared.

• Good news for the labor market is bad news for traders. S&P 500 futures and futures on the tech-heavy Nasdaq 100 sank as investors boosted bets that another Fed hike is in the cards. The yield on 10-year Treasuries surged. Gold fell.

Source: U.S. Bureau of Labor Statistics

Quick Facts:

• Total nonfarm payroll employment increased by 187,000 in June.
• The federal unemployment rate rose by 0.3 percentage point to 3.8 percent.
• Employment continued to trend up in health care, leisure and hospitality, social assistance, and construction. Employment in transportation and warehousing declined.
• The unemployment rate rose by 0.3 percentage point to 3.8 percent in August, and the number of unemployed persons increased by 514,000 to 6.4 million.
• In August, the number of persons not in the labor force who currently want a job was 5.4 million.

Looking Forward:

• The unemployment rate was 3.8%, up significantly from July and the highest since February 2022, and nonfarm payrolls estimates for previous months showed sharp downward revision. That increase in the jobless level came as the labor force participation rate rose to 62.8%, the highest since February 2020, just before the Covid pandemic declaration. The total labor force size increased by 736,000.
• “The broad message here seems to be that we are nearing full employment, with supply and demand coming more into balance,” Bank of America U.S. economist Stephen Juneau said in a client note. “The gains are concentrated in the laggard sectors. The rest of the labor market probably is at full employment.”
• Goldman Sachs said the payroll numbers help confirm the firm’s forecast that the Fed is finished hiking rates during this cycle. Through a series of 11 increases, the central bank has taken its key borrowing rate from near-zero to a target range of 5.25%-5.5%. Recent data has painted a mixed picture of where the economy is headed, with overall growth holding steady as consumers continue to spend.

• Job openings fell to 8.83 million in July. That’s still well above where they were before the Covid pandemic but is the lowest level since March 2021. That equated to 1.5 openings for every worker the BLS counts as unemployed.

Source: U.S. Bureau of Labor Statistics

Quick Facts:

• Total nonfarm payroll employment increased by 187,000 in July.
• The federal unemployment rate dropped by 0.1 percentage point to 3.5 percent.
• Job gains occurred in health care, social assistance, financial activities, and wholesale trade.
• The unemployment rate has ranged from 3.4 percent to 3.7 percent since March 2022.
• The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.2 million in July.

Looking Forward:

• As overall job gains slowed, the labor market remains healthy (albeit perhaps too warm for the Federal Reserve’s liking) Wages picked up at a higher rate than forecast, with a 4.4% increase from the year-ago period. The unemployment rate fell and remains near the lowest in decades. Participation remained at 62.6% for the fifth straight month.  
• There were signs of cooling throughout the report, though: Temporary help services continued their slide, average hours worked ticked down, and some categories that led the boom in job growth in the post-pandemic period continue to cool, including manufacturing and transportation/warehousing. 
• One less-than-friendly aspect of the employment data was the downward revision to the June figure. This means that every single payroll release in the first half of the year has been revised lower. That is the longest streak of downward revisions since the Global Financial Crisis, and funny enough comes after a streak of six upward revisions in the second half of last year.

• It seems like most analysts are in agreement that the labor market is slowing down and will probably continue to do so. Less clear is how meaningful the decline so far will be for the Fed and inflation debate.

Source: U.S. Bureau of Labor Statistics

Quick Facts:

• Total nonfarm payroll employment increased by 209,000 in June.
• The federal unemployment rate dropped by 0.1 percentage point to 3.6 percent.
• Employment continued to trend up in government, health care, social assistance, and construction.
• The unemployment rate has ranged from 3.4 percent to 3.7 percent since March 2022.
• The number of persons employed part-time for economic reasons increased by 452,000 to 4.2 million in June.

Looking Forward:

• The June job gains, released Friday, were nearly 100,000 positions below May’s stronger-than-expected showing of 306,000 and fell below economists’ expectations for a net gain of 225,000 jobs. It’s the lowest monthly gain since a decline in December 2020. June’s total is the smallest since December 2019. That being said, last month’s job growth still outpaces the pre-pandemic average.   
• Federal Reserve policymakers are keenly focused on the strength of the labor market as they debate how much further the economy needs to cool to ensure that quick inflation fades back to a normal pace. Fresh labor market data released on Friday probably offered little to dissuade them from raising interest rates at their meeting this month. The June data is the last payrolls report that officials will receive before the central bank’s July 25-26 meeting.
• There are indications of some slowing in other industries. In June, the number of people employed part-time for economic reasons grew by 452,000 to 4.2 million, an increase that was partially reflective of people “whose hours were cut due to slack work for business conditions,” the BLS noted in Friday’s report.

Source: U.S. Bureau of Labor Statistics

Quick Facts:

• Total nonfarm payroll employment increased by 339,000 in May.
• The federal unemployment rate rose by 0.3 percentage points to 3.7 percent.
• Job gains occurred in professional and business services, government, health care, construction, transportation and warehousing, and social assistance.
• The unemployment rate has ranged from 3.4 percent to 3.7 percent since March 2022.
• The number of job losers and persons who completed temporary jobs increased by 318,000 to 3.0 million in May.

Looking Forward:

• “The U.S. labor market continues to demonstrate grit amid chaos – from inflation to high-profile layoffs and rising gas prices,” said Becky Frankiewicz, president and chief commercial officer of Manpower Group. “With 339,000 job openings, we’re still rewriting the rule book and the U.S. labor market continues to defy historical definitions.”   
• Recent data has shown that consumers continue to spend, though they are dipping into savings and increasingly using credit cards to pay for their purchases. A resilient labor market also has helped underpin spending, with job openings rising back above 10 million in April as employers still find it difficult to fill open positions. 
• Other data points have shown that the manufacturing sector is in contraction, though the much larger services sector has held in expansion. The ISM manufacturing index released Thursday also showed that prices are pulling back, a positive sign for the Fed.  
• Policymakers have signaled that they may skip another rate hike at their meeting later in June as they examine how tighter monetary policy is affecting the economy. However, some officials have hinted they are open to raising rates for the 11th straight time. 

Source: U.S. Bureau of Labor Statistics

Quick Facts:

• Total nonfarm payroll employment rose by 253,000 in April.
• The Federal unemployment rate edged down to 3.4 percent.
• Employment continued to trend up in professional and business services, health care, leisure and hospitality, and social assistance.
• Both the unemployment rate, at 3.4 percent, and the number of unemployed persons, at 5.7 million, changed little in April. The unemployment rate has ranged from 3.4 percent to 3.7 percent since March 2022.
• The number of job losers and persons who completed temporary jobs decreased by 307,000 in April to 2.6 million.

Looking Forward:

• Wall Street opened sharply higher following the jobs news, with the Dow Jones Industrial Average gaining nearly 400 points, while Treasury yields jumped as well. The move higher followed a strong earnings report from Apple and a powerful rebound in banking stocks.
• Despite the bank troubles and recession fears, the Federal Reserve this week raised its benchmark interest rate another quarter percentage point, taking it to its highest level since August 2007. Fed Chairman Jerome Powell acknowledged that higher interest rates were pressuring households, though he noted that the labor market has remained strong.
• Another encouraging sign for the Fed is that more Americans are looking for work. The more workers who are available to employers, the less pressure employers face to raise pay.
• Steadily rising borrowing costs have inflicted some damage. Pounded by higher mortgage rates, sales of existing homes were down 22 percent in March from a year earlier. Investment in housing has cratered over the past year. America’s factories are slumping, too. An index produced by the Institute for Supply Management, an organization of purchasing managers, has signaled a contraction in manufacturing for six straight months. 

Source: U.S. Bureau of Labor Statistics