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Economy in Brief

U.S. Payrolls Rose Double Expectations
by Tom Moeller November 2, 2007

Nonfarm payrolls increased 166,000 last month. The gain was double the rise expected by the consensus of economists, although the increase in September jobs was revised slightly downward to 96,000 from the 110,000 reported last month.

An increase in private service sector jobs in October added nearly all of the heft to last month's job gain. The increase of 154,000 was provided by a 65,000 (2.1% y/y) rise in professional & business service jobs and a 7,500 (3.1% y/y) rise in jobs in the education sector. Additionally, 35,100 (3.2% y/y) jobs were added in the health care sector and the leisure industry added 56,000 (3.3% y/y) workers. These gains offset weak or negative growth elsewhere in service sector jobs.

In what is perhaps a positive sign for future growth in jobs, employment in the temporary help industry rose 20,200 (-1.6% y/y) and offset all of the prior month's decline.

Employment in the government sector also rose a respectable 36,000 (1.0% y/y).

Factory sector payrolls fell another 21,000, adding to a decline that began early last year. Again, these declines are at odds with the recent ISM reports of job growth in manufacturing. Construction employment fell by 5,000 last month after a 14,000 worker decline during September.

Average hourly earnings increased 0.2% and the prior month's gain was revised down slightly. Factory sector earnings rose 0.1% (2.9% y/y) and private service-providing earnings rose 0.2% (3.9% y/y).

The unemployment rate held steady at 4.7% last month. Household employment fell 250,000 (+0.5% y/y) and offset about half of the prior month's surge while the labor force fell 211,000 (+1.8% y/y) after jumping 573,000 in September. The labor force participation rate fell slightly to 65.9% and that was down from 66.2% during all of last year.

Employment : 000s October September August Y/Y 2006 2005 2004
Payroll Employment 166 96 93 1.2% 1.9% 1.7% 1.1%
      Previous -- 110 93 -- -- -- --
  Manufacturing -21 -17 -45 -1.4% -0.2% -0.6% -1.3%
  Construction -5 -14 -29 -1.4% 4.8% 5.2% 3.6%
Average Weekly Hours 33.8 33.8 33.8 33.9 (Oct '06) 33.8 33.8 33.7
Average Hourly Earnings 0.2% 0.3% 0.3% 3.8% 3.9% 2.8% 2.1%
Unemployment Rate 4.7% 4.7% 4.6% 4.4% (Oct '06) 4.6% 5.1% 5.5%
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