The
Bureau of Labor Statistics‘ (
Observations from the employment reports include:
* The disagreement between the establishment (+261,000
jobs) and household surveys (-328,000 employed) was quite noticeable. The
validity of the surveys is questionable when they are misaligned to this degree.
* Goods-producing industries added 33,000 jobs; service-providers: +228,000. Notable job gains occurred in health care (+52,600), professional and technical services (+42,700), and manufacturing (+32,000). Total nonfarm employment (153.3 million) is now 543,000 jobs above its pre-pandemic level in February 2020. Private-sector employment is 1.1 million higher than in February 2020, while government employment is 557,000 lower. Employment is also perhaps nearly 7.2 million below its potential if accounting for growth in the working-age population since January 2006.
As mentioned above, manufacturing added 33,000 jobs. That result may be consistent with the change in the Institute for Supply Management’s (ISM) manufacturing employment subindex, which moved to breakeven -- from contraction -- in October. Wood products employment contracted by 900 (ISM unchanged); paper and paper products: +900 (ISM unchanged); construction: +1,000 (ISM rose).
* The number of employment-age persons not in the labor force rose (+201,000) to 99.9 million; that level is 4.8 million higher than in February 2020. Despite the above-mentioned job gains, the employment-population ratio (EPR) ticked down marginally 60.0%; the EPR is 1.2PP below the February 2020 level.
* Because the civilian labor force shrank by 22,000 in October, the labor force participation rate also edged down fractionally to 62.2%. Average hourly earnings of all private employees increased by $0.12 (to $32.58), and the year-over-year increase slipped to +4.7%. Since the average workweek for all employees on private nonfarm payrolls remained at 34.5 hours for a fifth consecutive month, average weekly earnings rose (+$4.14) to $1,124.01 (+6.0% YoY). With the consumer price index running at an annual rate of +8.2% in September, the average worker keeps losing purchasing power. In fact, average hourly wages have lagged CPI since April 2021; average weekly wages since June 2021.
* Full-time jobs fell (-433,000) to 132.2 million. Workers employed part time for economic reasons (shown in the graph above) -- e.g., slack work or business conditions, or could find only part-time work -- declined by 183,000, while those working part time for non-economic reasons edged up (+41,000); multiple-job holders: -250,000. With significant declines among almost every worker category, from where did the job gains come?
For a “sanity test” of the job numbers, we consult
employment withholding taxes published by the U.S.
Treasury. Although “noisy” and highly
seasonal, the data show the amount withheld in October increased by $10.2 billion,
to $247.2 billion (+4.3% MoM; +12.2% YoY). To reduce some of the monthly volatility
and determine broader trends, we average the most recent three months of data
and estimate a percentage change from the same months in the previous year; the
average of the three months ending October was 8.0% above the year-earlier
average.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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