 | Nonfarm Payrolls Increased 531,000 in October |
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| Posted Under: Data Watch • Employment • Government • COVID-19 |
Implications: For the first time in a while, the payroll data beat the consensus estimate. As we suspected, the end of excess unemployment benefits is making it easier for employers to fill jobs, and this should continue in the months ahead. However, it's almost as if the Biden Administration is looking for a way to slow this growth by using OSHA to impose vaccine and mask mandates on private companies. This could create more turmoil in the labor market, which we have seen at airlines and hospitals, as employees fight mandates in court and argue over natural immunity. Competing headwinds and tailwinds should make economic data interesting in the months ahead. Payrolls rose 531,000 in October, beating the consensus expected 450,000, while job growth in the prior two months was revised up 235,000, almost all in the private sector. Meanwhile, civilian employment, an alternative measure of jobs that includes small-business start-ups, rose 359,000, which helped push the unemployment rate down to 4.6%, the lowest since March 2020. Another piece of good news was that average hourly earnings rose 0.4% in October and are up 4.9% in the past year. Total hours worked rose 0.2% in October and are up 4.2% in the past year. Combining hourly pay and the number of hours worked, total worker pay (excluding irregular bonuses) have increased 9.2% in the past year and are up 6.8% since February 2020 (pre-COVID). This is important because it means that the growth in total worker pay is outstripping inflation. Still, the labor market is far from fully healed. Payrolls remain 4.2 million below where there were in February 2020 while civilian employment is 4.7 million below. Meanwhile, the labor force (people who are either working or looking for work) is 3.0 million below pre-COVID levels. The labor force participation rate came in at 61.6% in October, the same as September, and has been hovering near that level for the past seventeen months, well below the pre-COVID peak of 63.4%. We don't expect that to climb in any significant way in the near future unless and until workers and businesses can have confidence the Biden Administration's OSHA rules won't be implemented.
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