By Denny Gulino
WASHINGTON (MaceNews) – One of the most over-anticipated economic breakthroughs finally did happen Friday as the job report’s annual increase in U.S. wages pierced the 3% mark, hitting an increase of 3.1% – thanks in part to a favorable comparison month a year ago – while payrolls in October added 250,000 new slots and the unemployment rate stayed at 3.7%.
Analysts were not inclined to quibble that the strongest increase in average hourly wages in nine years was helped by a weakish comparison month a year earlier or that it was still a percentage point or more below typical numbers before the Great Recession. “Part of that increase was because the year ago reference was when wages dipped” because of a weather effect, Bureau of Labor Statistics economist Karen Kosanavich told Mace News.
The report’s overall strength came despite Hurricane Michael’s landing in the Florida panhandle during the month. There was no discernible effect on survey response rates, the BLS said, and Kosanavich said the category of those full-timers working less than 35 hours a week totaled a million, fewer than the million and a half who saw their hours cut in September when Hurricane Florence hit the East Coast. Those employed who were unable to work at all were 200,000, also fewer than the 300,000 kept from their jobs in September.
Leisure and entertainment employment, particularly sensitive to weather, rose 42,000 in October after showing zero movement in September.
The unemployment rate’s strength was based on solid increases for those employed and not because the workforce got smaller, as has happened in some months. The change in the number counted “not in the labor force” got smaller by 487,000 as the labor force went “significantly up,” she said.
The employment-population ratio moved up two tenths, to 60.6%, as did the labor participation rate, to 62.9%, not huge gains by any means yet still relatively rare moves in the right direction for series that have moved very little in the past year.
In payrolls, there was “fairly widespread growth,” economist Kosanavich said, with the biggest contributors being manufacturing, construction, professional and business services, health, transportation and warehousing. Retail, finance and government showed little change.
Revisions to two previous months boosted August to a payrolls total of 286,000 while subtracting enough from September to bring it down to 118,000. The net two-month revision was zero. The average monthly increase became a positive 218,000 for the past three months.
UPDATE:
By early afternoon the Dow industrials were in a steep decline, down more than 1%. The Nasdaq was off 1.8% and the S&P 500 off 1.4%. The 10-year Treasury was also falling in price while its yield was up 14/32ds to 3.187%.