After a disappointing payrolls report last month, which was downward revised to 118K jobs mostly due to a hurricane impacting hiring and resulting in a sharp drop in retail and hospitality jobs, October was the payback month with many of the jobs "lost" in September coming back and headline payrolls printing at 250K, 50,000 more than the 200K expected.
Notably, it was not just last month's hurricane which impacted the data, but also last year's duo of Hurricanes which negatively impacted hourly earnings in Oct 2017 as SouthBay Research notes. It was this weakness that created the "base effect" wage spike this month, resulting in the artificially high 3.1% average hourly earnings print, the highest since April 2009.
Hurricanes aside, the job market continues to grow at a blistering pace with the following key highlights of greatest impact:
- Manufacturing has soared with +296,000 jobs added this year
- Construction wages +4.2%, beating overall 3.1% rate (best in nearly a decade)
- Lowest Hispanic unemployment rate ever
To be sure, much of this overheating in the US labor market is the result of Trump's fiscal stimulus, whose impact will soon begin to fade at a rapid pace as payback time comes. Until then, however, the labor market remains especially strong - in fact not a single major category saw a drop in employment - with the following industries especially hot right now:
- Employment in the well-paying professional and business services increased by 35,000.
- Health care employment rose by 36,000 as hospitals added 13,000 jobs, and employment in ambulatory health care services continued to trend up, +14,000.
- Employment in transportation and warehousing rose by 24,000. Job gains occurred in warehousing and storage (+8,000) and in couriers and messengers (+8,000).
- Construction employment continued to trend up in October, up +33,000.
- Employment in manufacturing continued to trend up in September, rising +18,000
- Employment in mining, employment in support activities for mining rose by +5,000
Looking over the past year, the following charts from Bloomberg show the industries with the highest and lowest rates of employment growth for the prior year. The latest month’s figures are highlighted.