U.S. economy adds better-than-expected 128,000 jobs in October; unemployment rate up to 3.6%

U.S. total nonfarm payroll employment in the U.S. rose by 128,000 in October as the U.S. jobless rate lifted off its 50-year low and rose from 3.5% to 3.6%, the U.S. Bureau of Labor Statistics reported Friday (Nov. 1).

Nationwide, notable job gains occurred largely in service-oriented establishments such as fast food restaurants, bars, social assistance and financial activities, while manufacturing sector suffered job losses due to the nationwide GM strike that took nearly 42,000 workers off payrolls.

In September, the U.S. unemployment fell 0.2 percentage points to 3.5%, the lowest level since 1969 as 180,000 jobs were added, revised upward from 136,000. Job growth has averaged 167,000 per month thus far in 2019, compared to a monthly gain of 223,000 in 2018. The October job gains still were ahead of Wall Street forecasts of only 75,000 payroll additions.
In a statement, U.S. Secretary of Labor Eugene Scalia highlighted that fact that this is the 19th straight month that the unemployment rate has been at or below 4%.

“In September, 136,000 new jobs were added, and upward revisions for July and August added an additional 45,000 jobs,” said Scalia. “Since January 2017, the U.S. economy has added more than six million jobs. There are now 158,269,000 Americans employed.”

The change in total nonfarm payroll employment for August was revised up by 51,000 from 168,000 to 219,000 along with the September changes, moving top employment gains for the prior two-month period to 95,000 more than previously reported.

Two weeks ago, Arkansas’ unemployment rate rose 0.1 percentage point off its all-time low of 3.4% as the state’s civilian labor force declined by 319, a result of 552 fewer employed and 233 fewer unemployed workers.

Separately, the October Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, climbed above growth neutral after two straight months of below the 50.0 threshold.

After two straight months of below growth neutral readings, the region’s overall index that ranges from zero to 100 rose to 52.6 from September’s 49.1. The October employment index increased to a weak 50.0 from September’s 46.7. The highly watch economic indicator noted that the availability of workers continues to constrain job growth in the region.

“For 2019, Mid-America annualized employment growth has been 1.0% compared to a much higher 1.9% for the U.S. Despite the negative impact of the trade war, more than half, or 54%, support continuing or expanding trade restrictions and tariffs on imports from China,” said economist Ernie Goss, director of Creighton University’s Economic Forecasting Group. “For 2019, the Mid-America economy has been expanding at a pace well below that of the nation. The trade war and the global economic slowdown have cut regional growth to approximately one-half that of the U.S. October’s survey results indicate that regional growth is likely to bottom at positive, but slow rate, in fourth quarter of this year.”

For Arkansas, the October Business Conditions Index increased to 53.4 from September’s 48.3. Components of the index from the monthly survey of supply managers were new orders at 59.2, production or sales at 57.9, delivery lead time at 49.2, inventories at 49.7, and employment at 51.2.

“Over the past 12 months the state’s manufacturing sector has boosted jobs by 1.3%, third among the nine Mid-America states, and hourly wages by 4.8%, also third in the region,” said Goss. “Based on recent surveys of manufacturers in the state, I expect job growth to slow, but remain positive, and hourly wage growth to decline to an annualized range of 3.5% – 4.0% through the first quarter of 2020.”