Recent Updates

  • Hungary: Industrial Production, Industrial Sales (May)
  • Slovakia: CPI, Average Fuel Prices (Jun)
  • Spain: CPI, HICP (Jun)
  • UK: Monthly GDP/GVA Estimates, IP, International Trade, Construction Output, Contributions to Monthly GVA, Index of Services, Export
  • more updates...

Economy in Brief

U.S. Job Growth and Worker Earnings Strengthen
by Tom Moeller  November 2, 2018

The labor market is robust, strong enough to lift workers' pay. Average hourly earnings increased 0.2% during October and raised the y/y increase to 3.1%, the strongest gain since April 2009. The rise matched expectations in the Action Economics Forecast Survey. Nonfarm payrolls increased 250,000 (1.7% y/y) following a 118,000 September gain, revised down from 134,000. The gain in August payrolls was revised up, however, to 286,000 from 270,000. A 190,000 rise had been expected. The unemployment rate held at an expected 3.7%. It was the lowest rate since December 1969.

From the establishment survey, the 0.2% increase in average hourly earnings followed an unrevised 0.3% September rise. The August increase was revised up to 0.4% from 0.3%. Strength in private service-producing industries was robust. The 0.2% increase in earnings increased the y/y rise to 3.3%, up from 2.1% in each year from 2010 to 2012. Information sector earnings gained 0.2%, lifting the y/y increase to 5.2%. Earnings in the financial sector held steady and the y/y increase eased to 4.1% from its January high of 5.3%. Leisure & hospitality compensation rose 0.2% as the y/y increase strengthened to 3.4%. Trade, transportation & utilities earnings also gained 0.2% and surged 3.3% y/y, a rise from 2.2% one year ago. Earnings in professional & business services rose a steady 0.2% m/m and an improved 3.1% y/y. Education sector earnings also rose a steady 0.2% (3.4% y/y).

The 250,000 rise in payroll employment was above the 213,000 average for the first ten months of this year. That compared to a 182,000 monthly average in 2010. The recent gain reflected a 67,000 increase (3.3% y/y) in goods-producing jobs. Factory sector employment rose 32,000 (2.3% y/y), the strongest gain since December. Construction sector jobs rose an improved 30,000 (4.4% y/y). Employment in the mining sector increased a steady 5,000 (10.1% y/y).

Private service sector employment rose 179,000, a gain led by a 44,000 rise (2.1% y/y) in education & health service sector jobs which followed a 26,00 improvement. Leisure & hospitality employment followed with a strengthened 42,000 increase (1.6% y/y). Employment here held steady in September due to Hurricane Florence. Jobs increased 37,000 (1.1% y/y) in trade, transportation & public utilities after an 8,000 decline. Professional & business service sector jobs followed with a 35,000 improvement (2.6% y/y). Temporary help employment rose 3,300 (2.3% y/y) following three months of stronger increase. Jobs in the finance sector improved a lessened 7,000 (1.4% y/y) and information services sector employment also rose 7,000 (-0.3% y/y) following declines in three of the four prior months.

Government sector employment improved 4,000 as local government hiring improved 2,000 (0.5% y/y) after a 5,000 decline. Jobs in the federal government improved 1,000 (-0.1% y/y) as they did in five of the previous six months. State government employment also rose a lessened 1,000 (0.3% y/y) for the second consecutive month.

The length of the workweek improved to 34.5 hours, and equaled the average of the prior four quarters. The mining & logging workweek rose to 45.9 hours while the factory sector workweek eased to 40.8 hours. The construction sector workweek was unchanged at 38.9 hours. The private service sector workweek held steady at 33.3 hours for the third straight month. The financial sector workweek jumped to 37.8 hours and professional & business services hours were slightly longer at 36.2. Education & health service sector hours held at 33.0 for the fifth straight month while leisure & hospitality hours lengthened to 26.1.

From the household employment survey, the unchanged unemployment rate of 3.7% reflected a 600,000 increase in employment and a 711,000 rise in the labor force. The overall unemployment rate, including marginally attached & those working part-time for economic reasons, eased to 7.4%. The labor force participation rate edged up m/m to 62.9%, but has trended sideways for three years. The labor force participation rate for women aged 25-54 years old  jumped to 75.8% and for men of that age it rose to 89.0%. The average duration of unemployment eased to 2.5 weeks.

The unemployment rate for those with less than a high school diploma rose to 6.0%, its highest level since December. The rate for high school graduates but no college increased to 4.0%. For individuals with less than a bachelors degree, the rate eased to 3.0% and for college graduates, it held steady at 2.0%.

By age group, individuals aged 16-24 years were 8.3% unemployed. Those aged 20-24 were 6.8% without work. Individuals aged 25-54 years old were 3.1% jobless, and persons over age 55 were 2.8% unemployed.

The labor market data are contained in Haver's USECON database. Detailed figures are in the EMPL and LABOR databases. The expectations figures are in the AS1REPNA database.

Employment: (SA, M/M Change, 000s) Oct Sep Aug Oct Y/Y 2017 2016 2015
Payroll Employment 250 118 286 1.7% 1.6% 1.8% 2.1%
 Previous Estimate -- 134 270 -- -- -- --
  Manufacturing 32 18 11 2.3 0.7 0.1 1.2
  Construction 30 20 31 4.4 3.4 4.1 5.0
  Private Service-Producing 179 79 218 1.7 1.8 2.2 2.4
  Government 4 -3 19 0.4 0.4 0.9 0.7
Average Weekly Hours - Private Sector 34.5 34.4 34.5 34.4 34.4 34.4 34.5
Private Sector Average Hourly Earnings (%) 0.2 0.3 0.4 3.1 2.5 2.6 2.3
Unemployment Rate (%) 3.7 3.7 3.9 4.1 4.4 4.9 5.3
large image