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October's U.S. jobs report added less than expected new non-farm jobs, 261,000 under the 313,000 expected the Bureau of Labor Statistics said on Friday. The unemployment rate is back at a 16-year low of 4.1%. Hurricane affects still impact as particpation rate falls.

A concern for the Fed has been wage growth, this continues as it is unchanged from September. Average hourly earnings were unchanged month-on-month, and 2.4% year-on-year. Economic theory is out the window as wages are barely rising with the unemployment rate is at a post-crisis low. This brings into question what is the real unemployment rate and the true inflation, cost of living rates.

It isn't that simple though as the Fed's largely experimental policy keeps surprising them. There has not been the wage growth anticipated based on historical models and the leaned on economic relationships. With the social payments and huge black market in the U.S. there has not been a recovery in the labor participation rate either. Hence we get soft productivity and inflation dynamics in a politically challenged nation.

 

Bureau of Labor Statistics June Employment Report
Release Time: Friday 3 November 2017 - 8:30 ET

Employment:

  • October non-farm payrolls +261K vs +313K expected Prior -33K (revised to +18K)
  • Two-month net revision +90K
  • Private payrolls 252K vs +302K expected
  • Unemployment rate 4.1% vs 4.2% expected (lowest since 2001)
  • Participation rate 62.7% vs 63.1% prior
  • Underemployment rate 7.9% vs 8.3% prior

Earnings:

  • Average hourly earnings m/m 0.0% vs +0.2% expected
  • Average hourly earnings y/y 2.4% vs +2.7% expected

Among the major worker groups, the unemployment rates for adult women (3.6 percent) and Whites (3.5 percent) declined in October. The jobless rates for adult men (3.8 percent), teenagers (13.7 percent), Blacks (7.5 percent), Asians (3.1 percent), and Hispanics (4.8 percent) showed little change. (See tables A-1, A-2, and A-3.)
 
In October, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.6 million and accounted for 24.8 percent of the unemployed. (See table A-12.)

Employment in food services and drinking places rose sharply in October (+89,000), following a decrease of 98,000 in September when many workers were off payrolls due to the hurricanes.
 
Professional and business services added 50,000 jobs in October, about in line with its average monthly gain over the prior 12 months.
 
Manufacturing employment rose by 24,000 in October, with job gains in computer and electronic products (+5,000) and chemicals (+4,000). Employment in fabricated metals continued to trend up (+4,000). Manufacturing has added 156,000 jobs since a recent employment low in November 2016.
 
Health care added 22,000 jobs in October. Employment in ambulatory health care services continued to trend up over the month (+16,000). Health care has added an average of 24,000 jobs per month thus far in 2017, compared with an average gain of 32,000 per month in 2016.
 
Employment in other major industries, including mining, construction, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, changed little in October.


Source: https://www.bls.gov/news.release/pdf/empsit.pdf

From the Traders Community News Desk

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