- Payroll employment jumped 128k in October – and was stronger controlling for striking workers
- The unemployment rate edged up to 3.6%
- Wage growth held at 3.0% year-over-year
US labour markets remained resilient in October despite ongoing concerns about a slower economic backdrop in the wake of trade disruptions and slower global growth. The 128k increase in employment was despite a widely-publicized strike at GM in the month. 46k workers were reportedly on strike in October, and employment in motor vehicle and parts manufacturing fell 41k. That negative will reverse in November. And 95k worth of upward revision to the previously reported payroll growth rates over the prior two months combined also makes recent trends look stronger. The pace of employment growth has still slowed year-to-date, but that probably has as much to do with supply factors (already low unemployment and soft underlying demographics) as near-term demand concerns. The unemployment rate ticked up to 3.6% but after hitting a 50-year low in September. And wage growth was a respectable 3.0% – matching an upwardly revised September reading.
Other data has shown no evidence that layoffs are increasing. The US manufacturing sector has been soft, but not ‘recession’-soft. To be sure, there is room for the industrial sector to soften further with US-China trade tensions still remaining elevated. But household spending is more than 70% of the US economy – and strong labour markets, for now, still leave near-term household income/spending supports looking solid.
