US Added 531,000 Jobs in October With Lower Unemployment Rate as Participation Slips Again

US in October added 531k non-farm payrolls jobs more than forecasted 425k. September prev 1945K (revised to +312K). Unemployment rate fell to 4.7%. US Average Hourly Earnings (M/M) rose 0.4% Change in private payrolls +604K Change in manufacturing payrolls +60K

US in October added 531k non-farm payrolls jobs more than forecasted 425k. September prev 1945K (revised to +312K). Unemployment rate fell to 4.7%. US Average Hourly Earnings (M/M) rose 0.4% Change in private payrolls +604K Change in manufacturing payrolls +60K

Working

October 2021 U.S. Employment Report

The Covid-19 virus again threatens the global economy.  Is this Deja vu? The world’s economy was shut down and much of America has stay at home orders. Jobless claims numbers have been improving after records and unfortunately the story is much worse as people have not all been able to return to work with jobs replaced.

The market had expected the October report released Friday to show nonfarm payrolls rise 450k new jobs which it beat with 531k new jobs with a sputtering economy.  The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50 year low 3.5% with higher participation before the Covid-19 lockdown now to 5.4%.

US jobs data was good enough for the recently announced taper. Headline NFP stronger 531k vs 450k than expected with numerous positives including upward revisions of 235k over past 2 months. Unemployment rate dipped to 4.7% vs 4.8% partly a function of participation falling unexpected to 61.6%.

US Jobs Oct 2021
 

October 2021 US Employment Report & Expectations

Employment:

  • Non-farm payrolls Oct: 531K (est 450K; prev 194K; prevR 312K)
  • Unemployment Rate: Oct: 4.6% (est 4.7%; prev 4.8%)
  • Labour Force Participation Rate Oct: 61.6% (est 61.7%; prev 61.6%)
  • Underemployment Rate Sep: 8.5% (prev 8.8%)
  • Two month net revision +235K Prior +194K +119k +27K -78k +158k -159k +11k +15k +145k
  • Change In Manufacturing Payrolls Oct: 60K (est 30K; prev 26K; prevR 31K)
  • Change In Private Payrolls Oct: 604K (est 420K; prev 317K; prevR 365K)
  • Change in Government Payrolls Sep: -123K (est 34K; prevR 34K)
  • Long-term unemployed at  2.3m vs 2.7m prior
  • The employment-population ratio 58.8% vs 58.7% prior (61% before pandemic)

The unemployment rate edged down to 4.6 percent in October. The number of unemployed persons, at 7.4 million, continued to trend down. Both measures are down considerably from their highs at the end of the February-April 2020 recession. However, they remain above their levels prior to the coronavirus (COVID-19) pandemic (3.5 percent and 5.7 million, respectively, in February 2020)

 

Employment Percentage Change From Feb 2020 to Aug 2021

Where the jobs were:

  • The biggest job gains occurred in leisure and hospitality (164K),
  • Professional and business services (100K),
  • Manufacturing (60K),
  • Transportation and warehousing (54K)

Where jobs were lost:

  • The biggest job losses occurred in public education which declined (-65K).

So far in 2021 monthly job growth has averaged 582K. Nonfarm employment has increased by 18.2 million since a recent trough in April 2020 but is down by 4.2 million from its pre-pandemic level.

Labour shortages continue to weigh even after federal government-funded unemployment benefits have expired and schools reopened. Some investors believe such shortages could get worse due to the White House’s vaccine mandate.

United States Non Farm Payrolls

Private Jobs

Private payrolls rose 604K in October of 2021, the strongest gain in 3 months and well above market forecasts of 400K

United States Nonfarm Payrolls - Private

Government Jobs

Government Payrolls in the United States fell by 73k in October of 2021, the biggest drop since February. Employment decreased in local government education and state government education (-43,000 and -22,000, respectively). Employment changed little in private education (+17,000). Since February 2020, employment is down by 370,000 in local government education, by 205,000 in state government education, and by 148,000 in private education.

 

United States Government Payrolls
 

 

Manufacturing Jobs

Manufacturing Payrolls in the United States increased by 60,000 in October, the highest since a 342,000 gain in June 2020 and compared to forecasts of 27,000 led by a gain in motor vehicles and parts (+28,000). Employment also rose in fabricated metal products (+6,000), chemicals (+6,000), and printing and related support activities (+4,000). Manufacturing employment is down by 270,000 since February 2020. source: U.S. Bureau of Labor Statistics

United States Manufacturing Payrolls 

 

Wages:

US Average Hourly Earnings (M/M) Oct: 0.4% (est 0.4%; prev 0.6%)

  • Average hourly earnings for all employees on US private nonfarm payrolls rose by 11 cents, or 0.4% over the month to $30.96 in October of 2021, matching market expectations and following a 0.6% rise in September and August.
  • In October, average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents to $26.26.
  • Over the past 12 months, average hourly earnings have increased by 4.9%, up from a 4.6% rise in the prior month and in line with market forecasts.

United States Average Hourly Earnings MoM

US Average Hourly Earnings (Y/Y) Oct: 4.9% (est 4.9%; prev 4.6%)

  • Average hourly earnings for all employees on private nonfarm payrolls rose by 4.9 year-on-year in October of 2021, in line with market expectations, following a 4.6 percent gain in the previous month.
  • It was the strongest increase since February.

United States Average Hourly Earnings YoY

 

Hours:

US Average Weekly Hours All Employees Sep: 34.7 (est 34.87; prev 34.87)

  • The average workweek for all employees on US private nonfarm payrolls decreased by 0.1 hour to 34.7 hours in October of 2021, compared to market forecasts of 34.8.
  • In manufacturing, the average workweek edged down by 0.1 hour to 40.3 hours, and overtime edged down by 0.1 hour to 3.2 hours.
  • The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 34.1 hours

 United States Average Weekly Hours

 

 

Household Survey Data

Transmission of material in this news release is embargoed until USDL-21-1930 8:30 a.m. (ET) Friday, November 5, 2021 THE EMPLOYMENT SITUATION — OCTOBER 2021

Total nonfarm payroll employment rose by 531,000 in October, and the unemployment rate edged down by 0.2 percentage point to 4.6 percent, the U.S. Bureau of Labor Statistics reported today. Job growth was widespread, with notable job gains in leisure and hospitality, in professional and business services, in manufacturing, and in transportation and warehousing. Employment in public education declined over the month.

The unemployment rate edged down to 4.6 percent in October. The number of unemployed persons, at 7.4 million, continued to trend down. Both measures are down considerably from their highs at the end of the February-April 2020 recession. However, they remain above their levels prior to the coronavirus (COVID-19) pandemic (3.5 percent and 5.7 million, respectively, in February 2020).

Among the major worker groups, the unemployment rate for adult men (4.3 percent) declined in October. The jobless rates for adult women (4.4 percent), teenagers (11.9 percent), Whites (4.0 percent), Blacks (7.9 percent), Asians (4.2 percent), and Hispanics (5.9 percent) showed little or no change over the month.

Among the unemployed, the number of permanent job losers, at 2.1 million, changed little in October but is 828,000 higher than in February 2020. The number of persons on temporary layoff, at 1.1 million, was little changed over the month. This measure is down considerably from the high of 18.0 million in April 2020 but is 306,000 above the February 2020 level.

In October, the number of long-term unemployed (those jobless for 27 weeks or more) decreased by 357,000 to 2.3 million but is 1.2 million higher than in February 2020. The long-term unemployed accounted for 31.6 percent of the total unemployed in October.

The labor force participation rate was unchanged at 61.6 percent in October and has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The participation rate is 1.7 percentage points lower than in February 2020. The employment-population ratio, at 58.8 percent, was little changed over the month. This measure is up from its low of 51.3 percent in April 2020 but remains below the figure of 61.1 percent in February 2020.

The number of persons employed part time for economic reasons, at 4.4 million, was little changed in October. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This measure has essentially returned to its February 2020 level.

The number of persons not in the labor force who currently want a job was 6.0 million in October, essentially unchanged over the month but up by 968,000 since February 2020. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force was little changed at 1.7 million in October. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was essentially unchanged over the month at 455,000.

Household Survey Supplemental Data

In October, 11.6 percent of employed persons teleworked because of the coronavirus pandemic, down from 13.2 percent in the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the 4 weeks preceding the survey specifically because of the pandemic.

In October, 3.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the 4 weeks preceding the survey due to the pandemic. This measure is down from 5.0 million in September. Among those who reported in October that they were unable to work because of pandemic-related closures or lost business, 13.3 percent received at least some pay from their employer for the hours not worked, little changed from the prior month.

Among those not in the labor force in October, 1.3 million persons were prevented from looking for work due to the pandemic. This measure is down from 1.6 million in September. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.)

These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Establishment Survey Data

Total nonfarm payroll employment rose by 531,000 in October. Thus far this year, monthly job growth has averaged 582,000. Nonfarm employment has increased by 18.2 million since a recent trough in April 2020 but is down by 4.2 million, or 2.8 percent, from its pre-pandemic level in February 2020. Job growth was widespread in October, with notable job gains occurring in leisure and hospitality, in professional and business services, in manufacturing, and in transportation and warehousing. Employment in public education declined over the month. (See table B-1. See the box note on page 5 for more information about how the establishment survey and its measures were affected by the coronavirus pandemic.)

Employment in leisure and hospitality increased by 164,000 in October and has risen by 2.4 million thus far in 2021. Over the month, employment rose by 119,000 in food services and drinking places and by 23,000 in accommodation. Employment in leisure and hospitality is down by 1.4 million, or 8.2 percent, since February 2020.

Professional and business services added 100,000 jobs in October, including a gain of 41,000 in temporary help services. Employment continued to rise in management and technical consulting services (+14,000), other professional and technical services (+9,000), scientific research and development services (+6,000), and legal services (+5,000). Employment in professional and business services is 215,000 below its level in February 2020.

Employment in manufacturing increased by 60,000 in October, led by a gain in motor vehicles and parts (+28,000). Employment also rose in fabricated metal products (+6,000), chemicals (+6,000), and printing and related support activities (+4,000). Manufacturing employment is down by 270,000 since February 2020.

Employment in transportation and warehousing increased by 54,000 in October and is 149,000 above its February 2020 level. In October, job gains occurred in warehousing and storage (+20,000), transit and ground passenger transportation (+16,000), air transportation (+9,000), and truck transportation (+8,000). Employment in couriers and messengers decreased by 5,000 in October, after increasing in the prior 3 months.

Construction employment rose by 44,000 in October, following an increase of 30,000 in September. In October, employment increased in nonresidential specialty trade contractors (+19,000) and in heavy and civil engineering construction (+12,000). Construction employment is 150,000 below its February 2020 level.

Health care added 37,000 jobs in October, with most of the gain occurring in home health care services (+16,000) and nursing care facilities (+12,000). Employment in health care is down by 460,000 since February 2020.

In October, employment in retail trade rose by 35,000. Employment gains occurred in food and beverage stores (+16,000), general merchandise stores (+15,000), health and personal care stores (+8,000), and electronics and appliance stores (+6,000). These gains were partially offset by a job loss in building material and garden supply stores (-10,000). Retail trade employment is 140,000 lower than its level in February 2020.

Employment in the other services industry increased by 33,000 in October, as personal and laundry services added 28,000 jobs. Employment in other services is 169,000 below its February 2020 level.

Employment in financial activities rose by 21,000 in October and has returned to its February 2020 level. Over the month, job growth occurred in real estate and rental and leasing (+12,000) and in securities, commodity contracts, and investments (+11,000).

Employment in wholesale trade increased by 14,000 in October, reflecting a gain in the durable goods component. Employment in wholesale trade is 158,000 lower than in February 2020.

Mining employment continued to trend up in October (+5,000) but is down by 87,000 from a peak in January 2019.

In October, employment decreased in local government education and state government education (-43,000 and -22,000, respectively). Employment changed little in private education (+17,000). Recent employment changes in public and private education are challenging to interpret, as pandemic-related staffing fluctuations have distorted the normal seasonal hiring and layoff patterns. Since February 2020, employment is down by 370,000 in local government education, by 205,000 in state government education, and by 148,000 in private education.

Employment in information changed little in October (+10,000) but is 122,000 lower than in February 2020.

In October, average hourly earnings for all employees on private nonfarm payrolls increased by 11 cents to $30.96, following large increases in the prior 6 months. Over the past 12 months, average hourly earnings have increased by 4.9 percent. In October, average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents to $26.26.

The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.7 hours. In manufacturing, the average workweek edged down by 0.1 hour to 40.3 hours, and overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 34.1 hours

The change in total nonfarm payroll employment for August was revised up by 117,000, from +366,000 to +483,000, and the change for September was revised up by 118,000, from +194,000 to +312,000. With these revisions, employment in August and September combined is 235,000 higher than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)

_____________ The Employment Situation for November is scheduled to be released on Friday, December 3, 2021, at 8:30 a.m. (ET).

 

August 2021 ADP U.S. Employment Report

ADP National Employment Report: Private Sector Employment Increased by 374,000 Jobs in August

 August 2021 Report Highlights

Total U.S. Nonfarm Private Employment: 374,000

By Company Size

– Small businesses: 86,000 — 1-19 employees 25,000 — 20-49 employees 61,000

– Medium businesses: 149,000 — 50-499 employees 149,000

– Large businesses: 138,000 — 500-999 employees 41,000 — 1,000+ employees 96,000

By Sector

– Goods-producing: 45,000

— Natural resources/mining 9,000

— Construction 30,000

— Manufacturing 6,000

– Service-providing: 329,000

— Trade/transportation/utilities 18,000

— Information 0

— Financial activities 13,000

— Professional/business services 19,000

– Professional/technical services 18,000

– Management of companies/enterprises -1,000

– Administrative/support services 3,000

— Education/health services 59,000

– Health care/social assistance 39,000

– Education 19,000

— Leisure/hospitality 201,000

— Other services 19,000

* Sum of components may not equal total, due to rounding. – Franchise Employment** — Franchise jobs 52,300

 “Our data, which represents all workers on a company’s payroll, has highlighted a downshift in the labor market recovery. We have seen a decline in new hires, following significant job growth from the first half of the year,” said Nela Richardson, chief economist, ADP.

“Despite the slowdown, job gains are approaching 4 million this year, yet still 7 million jobs short of pre-COVID-19 levels. Service providers continue to lead growth, although the Delta variant creates uncertainty for this sector. Job gains across company sizes grew in lockstep, with small businesses trailing a bit more than usual.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The Delta variant of COVID-19 appears to have dented the job market recovery. Job growth remains strong, but well off the pace of recent months. Job growth remains inextricably tied to the path of the pandemic.”

 The ADP estimate, done in conjunction with Moody’s Analytics, has varied widely from the government’s official nonfarm payrolls report, particularly during the pandemic. 

 Source: Automatic Data Processing, Inc

Jobless Claims for the week ending June 26th 2021

Initial jobless claims 364K versus 390,000 estimate. Prior week revised to 415K vs 411 last week. The data is the lowest since March 14, 2020 4-week moving average of initial jobless claims 392.75K vs 398.75K.

Continuing claims rises to 3469K vs 3382K estimate. The prior week was revised 23K to 3413K from 3390K previously reported (was a record low last week) 4-week moving average of continuing claims came in at 3481.75K vs 3556.75. The 4-week moving average is at the lowest level since March 21, 2020.

The largest increases in initial claims for the week ending June 19 were in Pennsylvania (+14,715), Michigan (+1,862), and Texas (+1,814),

The largest decreases were in Illinois (-4,762), California (-4,112), Ohio (-2,955), Florida (-2,229), and Georgia (-1,826).

In addition, many states recently decided to withdraw from federal unemployment benefit programs, following reports that it has been more difficult to hire as the benefits pay more than most minimum wage jobs. source: U.S. Department of Labor

 

Challenger, Gray & Christmas June Job Cuts Report

US-based companies announced 20,476 job cuts in June of 2021, the least since June of 2000 and 88% lower than in the same period last year.

“Companies are holding on tight to their workers during a time of record job openings and very high job seeker confidence. We haven’t seen job cuts this low since the Dot-Com boom”, said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

So far this year, employers have announced plans to cut 212,661 jobs, down 87% from the same period last year and the least since 1995 with the most redundancies announced in the Aerospace/Defense, Telecommunications and Energy.

Source: Challenger, Gray and Christmas, Inc.

  

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

 

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

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