October Employment Report: Not So Scary

Tom Cunningham, PhD
November 1, 2019
Read Time: min

Key Takeaways

  1. Overall, October's national employment report was positive.
  2. The General Motors strike impacted the manufacturing sector.
  3. Year-to-date, job gains have slowed in comparison to last year.

This morning’s national Employment Situation Report for the month of October was rather positive. In October, 128,000 jobs were added — well above the 98,000 jobs expected. However, the October report did reflect the impact of the General Motors (GM) strike, a 40-day United Auto Workers (UAW) which was still in place during the week of the BLS survey.  The precise consequence of that is tricky as there may be affected workers outside the narrow manufacturing sector, but the general expectation was on the order of 50K workers, and the BLS reports a drop of 42,000 jobs in auto manufacturing employment. Revisions to the previous two months added an additional 96,000 jobs.

Only two sectors lost jobs: Manufacturing, which could be attributed to the strike, and Government, where census-related temporary employment dropped by 20,000.  The census will be a volatile and distorting factor in the jobs report throughout its duration. Food services, social assistance, financial activities, business and professional services, and health care all saw gains. Other sectors were essentially flat.

The headline unemployment rate, U3, ticked up to 3.6%, which matched expectations. The broadest measure of labor underutilization, U6, also ticked up 0.1 percentage points to 7.0%. Average hours earnings moved up slightly more than expected. 

Overall, this is a positive report.  Earlier this week we saw a GDP number that was both above expectations, and consistent with an overall slowing economy.  Today’s report seems consistent with that story.

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About the Author

Tom Cunningham, PhD

Tom joined the Federal Reserve Bank of Atlanta as an economist with the macropolicy group in 1985. He was promoted to senior economist in 1989 and to research officer and senior economist with responsibility for the regional group in 1992. Cunningham retired in 2015 after a 30 year career. He has recently joined the Metro Atlanta Chamber’s leadership team as chief economist. Cunningham’s deep experience covers all aspects of applied economics and real estate trends, and he is a specialist in macroeconomic policy and regional analysis. Throughout his career, he has interacted with multiple business leaders and companies in the Southeast, and has deep knowledge and expertise in areas such as real estate mortgage, mortgage finance, insurance, capital markets, transportation and government.

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