US economy adds more than 100K jobs, unemployment rises slightly

Saturday, 02 Nov, 2019

The U.S. economy has cooled but continues to expand with employers hiring, consumers spending and growth stabilizing.

The U.S. economy added 128,000 workers to payrolls in October, the Labor Department announced Friday in its monthly jobs report.

Government data last Friday showed 46,000 GM employees were idle at the automaker's plants in MI and Kentucky during the period establishments were surveyed for October payrolls. This indicates that manufacturing activity in the country continued to weaken in October. "Small businesses are reporting cutbacks in hiring and investment plans".

The figure exceeded most analysts' expectations, who projected about 75,000 new jobs for the month.

Workers' incomes continued to rise last month. Excluding the strike and these temporary hires, economists estimate payrolls increased by about 190,000.

USA employers added 128,000 jobs in October as the unemployment rate inched up to 3.6%.

And even with the GM strike, the job gains in August and September were revised up by a combined 95,000, the Labor Department said.

The dollar was little against a basket of currencies on the employment report, while US Treasury prices fell.

IHS Markit said upward trends in other forward-looking indicators were also seen at the start of the fourth quarter with survey data for input purchasing, input stocks and finished goods inventories all moving in a positive direction, in line or above long-run averages. Though the ISM's forward-looking new orders sub-index increased last month, in remained in contraction territory.

Manufacturing employment decreased by 36,000 in October.

"The strength of this report, together with the news earlier this week of a slightly stronger-than-expected 1.9 percent annualized gain in third-quarter GDP, would seem to support the Fed's shift to a more neutral policy stance", Capital Economics senior U.S. economist Michael Pearce observed in a note to clients.

South Korea's economy slowed more than expected in the third quarter, growing 0.4% from the previous quarter.

Average hourly earnings for all private-sector workers in October rose 6 cents, or 0.2 percent to 28.18 US dollars, after slightly dropping in September. That would lift the annual increase in wages to 3.0% in October from 2.9% in September.

But reduced wage growth might be somewhat misleading.

By contrast, for workers with just a high school degree, their 3.7 percent unemployment rate is down 0.3 percentage points from year-ago levels and is 0.3 percentage points below its prerecession low.

"Following five successive cuts to India's benchmark rate, and an apparent lag in how quickly this feeds through to consumers, the impending lowering of commercial lending rates could potentially revive private consumption and help to shift growth higher as we approach the year end", Lima said.

The best news for the White House came on the revisions to August and September, both of which added significant numbers of jobs. That's actually a bit of good news as the survey not only found a strong increase in employment, but that was offset by an even larger increase in the labor force - that is, Americans who are working and looking for jobs.

The GM strike contributed to the loss of 41,600 auto factory jobs in October.

Manufacturing added 8,000, despite other data that shows factory output is contracting. Manufacturing is struggling under the weight of trade tariffs, which the White House has argued are meant to boost the sector.

Construction employment rose by 10,000 jobs in October.

Still, hiring has slowed this year.

The job gains were led by leisure and hospitality, education and health services and professional and business services. The federal government shed 17,000 jobs because many temporary workers completed their jobs for the 2020 census.