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Jobs Report for October: Here’s What to Watch For

Jobs Report for October: Here’s What to Watch For


The Labor Department will release the hiring and unemployment figures for October at 8:30 a.m. Eastern time on Friday. The monthly report provides one of the better barometers of the American economy.

Wall Street analysts expect the report to show that job creation picked up, with employers creating 195,000 jobs. The Bureau of Labor Statistics initially estimated that 134,000 jobs were added in September, a figure that will be revised. Over the past six months, average monthly job growth has averaged 200,000.

Unemployment is expected to remain at 3.7 percent, a nearly five-decade low.

Average hourly earnings are expected to rise by 0.2 percent, after moving up 0.3 percent in September. That would bring the year-over-year rate to 3.1 percent.

Here’s what else you should watch for:

Friday’s report from the Labor Department is the last official snapshot of the economy before Americans vote next week. The economy has historically not played an outsize role in midterm elections, and this political season, border control, health care and Brett Kavanaugh’s nomination to the Supreme Court have gobbled up airtime.

Still, voters cited “jobs and the economy” more frequently than any other issue as the most important in a survey conducted in early October for The New York Times by the online research platform SurveyMonkey. A strong showing would give Republicans another opportunity to claim credit.

“The labor market is still showing all green lights right now in terms of economic growth and job creation,” said Scott Anderson, chief economist at Bank of the West.

October would mark the 97th consecutive month of job growth, extending an already record-making streak. Average monthly payroll increases have floated above the 200,000 mark this year. Last week, the government estimated that the economy grew at an annual rate of 3.5 percent, slower than the 4.2 percent pace reached in the second quarter, but still hearty.

Confidence continues to run high among consumers and business leaders. As Chris Rupkey, chief financial economist at MUFG Union Bank, said last week, “There will come a day of reckoning for the economy after the money from the tax cuts is all gone, but for today Washington really has something to crow about.”

Blaming the weather is a time-tested tradition, but the hurricanes that hit the Southeast this fall could distort the view of the labor market. Hurricane Florence contributed to the weakness of September’s payroll growth of 134,000 jobs. The storm affected 1.7 million people, and employment fell by 35,000 in the Carolinas.

“Florence really held down the jobs growth number last month, it was below where we’ve been trending,” Mr. Anderson said. “We do expect some bounce back. Jobs came back in the Carolinas.”

The expected rebound, however, could be dampened by Hurricane Michael, which Gov. Rick Scott labeled “the worst storm that our Florida Panhandle has seen in a century.” In Florida and Georgia, jobless claims rose by 10,000.

Nikhil Sanghani, an economist at Capital Economics, said in a research note that “uncertainty around the hurricanes means that we would not be surprised to see a markedly higher or lower number for employment.”

Worries about fierce competition for holiday hires have prompted employers to be more aggressive by putting offers out earlier than usual and raising wages, recruiters said. The global outplacement and executive coaching firm Challenger, Gray & Christmas, which tracks hiring announcements, has reported that companies are looking to add 700,000 seasonal workers, the largest number since 2014.

The Bureau of Labor Statistics regularly adjusts employment figures to account for seasonal changes, but here, too, unusual shifts may not be fully captured and could artificially inflate (or deflate) the monthly totals.

Disappointing wage growth has been a running theme of the economic expansion, undermining workers’ sense of stability and security. It has also moderated some of the bounce that would otherwise accompany such a low jobless rate.

But there have been signs of a pickup in recent months. According to a report last week from the research arm of the payroll processing firm ADP, American workers are earning nearly $1 more per hour on average than they were a year ago. Workers in professional and business services benefited from some of the fastest growth, the report said.

William H. Stoller, chairman and chief executive of Express Employment Professionals, which is based in Oklahoma City, said pay in light industrial and administrative jobs, for example, had climbed to $14.50 to $15.50 an hour, from roughly $13.60 a year ago.

After three months of 0.3 percent increases in average hourly earnings, an increase of 0.1 percent would be enough to push up the annual gain to 3 percent, the fastest pace since April 2009. The year-over-year change will jump partly because there was an unusual drop in wages in October last year after Hurricane Harvey.



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