Job gains in October were less than expected, though the unemployment rate fell to its lowest since 2008.
Nonfarm payrolls grew by 214,000 in October, while the unemployment rate fell to 5.8%, according to the latest monthly employment report from the Bureau of Labour Statistics.
Following the report, US stock futures are modestly higher, with Dow futures up 29 points, S&P 500 futures up about 4 points, and Nasdaq futures up about 14 points.
Last month’s payroll gains were also revised up, to 256,000 from 248,000.
The drop in the unemployment rate takes this number to its lowest since 2008, and the “U-6” unemployment rate, which also includes those working part-time for economic reasons, fell to 11.5% from 11.8%. Unrounded, the headline unemployment rate came in at 5.756%.
In a note to clients following the report, Paul Ashworth at Capital Economics wrote that, “Although the 214,000 gain in non-farm payrolls in October was slightly below the consensus forecast at 235,000, this was still, on the whole, a strong employment report. A massive 638,000 surge in the alternative household survey measure of employment pushed the unemployment rate down to only 5.8%.”
The household survey is a broader employment measure that includes self-employed workers with unincorporated businesses, unpaid family workers, and agricultural workers. This reading, however, has a larger margin to error than the headline establishment survey.
Friday’s report showed that average weekly hours worked edged up, in-line with expectations, to 34.6 hours.
Wage growth remained somewhat disappointing, as wages grew 0.1% month-on-month, missing expectations for growth of 0.2%. Year-over-year, wages grew 2%, below expectations for a 2.1% gain.
The labour force participation rate, which is also closely watched by the market, rose slightly from last month, to 62.8% from 62.7%. The employment-population ratio increased to 59.2% in October, the highest level since 2009.
And on Twitter, Reuters’ Jamie McGeever said that this is the 49th consecutive month of job gains, a record streak dating back to the 1930s.
Additionally, this is the longest streak of 200,000+ payrolls gains since a 19-month streak that was seen from 1993-1995.
Here is what Wall Street was looking for ahead of the report:
- Nonfarm payrolls: +235,000
- Unemployment rate: 5.9%
- Average hourly earnings, month-over-month: +0.2%
- Average hourly earnings, year-over-year: +2.1%
- Average weekly hours worked: 34.6