If there was any doubt if the Fed would hike rates in December, it is gone now: October payrolls soared by 271K, smashing not only consensus of 184K, but the highest expected print. This was the highest monthly print since December 2014 when the gain was 329K and pushed the YTD average monthly gain from 199K to 206K.
The household survey likewise posted a solid gain of 320K, with the number of employed rising from 148,800 to 149,120, another post-crisis high.
The unemployment rate dropped from 5.1% to 5.0%, the lowest since April 2008, and most importantly, the average hourly earnings rose from 0.2% to 0.4%, the highest hourly earnings jump since 2009!
The two charts which the Fed will be most focused on are the following, showing both average hourly and weekly earnings rebounded solidly from recent week levels.
The breakdown between full and part-time jobs saw gains in both, with the former rising by 185K, while part-timers increased by 214K in October. As a result full-time jobs have now recovered all their job losses since the recession as shown on the chart below.
The breakdown from the report:
Total nonfarm payroll employment increased by 271,000 in October. Over the prior 12 months, employment growth had averaged 230,000 per month. In October, job gains occurred in professional and business services, health care, retail trade, food services and drinking places, and construction. (See table B-1.)
Employment in professional and business services increased by 78,000 in October, compared with an average gain of 52,000 per month over the prior 12 months. In October, job gains occurred in administrative and support services (+46,000), computer systems design and related services (+10,000), and architectural and engineering services (+8,000).
Health care added 45,000 jobs in October. Within the industry, employment growth continued in ambulatory health care services (+27,000) and in hospitals (+18,000). Over the past year, health care has added 495,000 jobs.
Employment in retail trade rose by 44,000 in October, compared with an average monthly gain of 25,000 over the prior 12 months. In October, job gains occurred in clothing and accessories stores (+20,000), general merchandise stores (+11,000), and automobile dealers (+6,000).
Food services and drinking places added 42,000 jobs in October. Over the year, the industry has added 368,000 jobs.
Construction employment increased by 31,000 in October, following little employment change in recent months. Employment in nonresidential specialty trade contractors rose by 21,000. Over the past 12 months, construction has added 233,000 jobs.
Employment in mining continued to trend down in October (-5,000). The industry has shed 109,000 jobs since reaching a recent employment peak in December 2014.
Employment in other major industries, including manufacturing, wholesale trade, transportation and warehousing, information, financial activities, and government, showed little or no change over the month.
The average workweek for all employees on private nonfarm payrolls remained at 34.5 hours in October. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours. (See tables B-2 and B-7.)
In October, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $25.20, following little change in September (+1 cent). Hourly earnings have risen by 2.5 percent over the year. Average hourly earnings of private-sector production and nonsupervisory employees increased by 9 cents to $21.18 in October. (See tables B-3 and B-8.)
The change in total nonfarm payroll employment for August was revised from +136,000 to +153,000, and the change for September was revised from +142,000 to +137,000. With these revisions, employment gains in August and September combined were 12,000 more than previously reported. Over the past 3 months, job gains have averaged 187,000 per month.