Employers added another 261,000 non-farm jobs to the nation’s payrolls in October, but none were from trucking, according to a Labor Department report issued Friday. A separate report showed another good month for the nation’s factories.
While the job gains pushed the nation’s unemployment rate down to a year 17-year low of 4.1%, the number of job additions was below the 310,000 expected by Wall Street.
The 33,000 job losses that were first reported for September were revised to show 18,000 jobs were gained during the month while the number of job additions in August was revised higher from 169,000 to 208,000.
Since January, the unemployment rate has declined by 0.7 of a percentage point, and the number of unemployed persons has decreased by 1.1 million.
During October, employment in food services and drinking places increased sharply, mostly offsetting a decline in September that largely reflected the impact of Hurricanes Irma and Harvey. Also last month, job gains occurred in professional and business services, manufacturing, and health care.
In the for-hire trucking sector, there were 100 job losses during October while the wider transportation and warehousing sector saw 8,400 job gains, due in large part to increases in the air transportation, couriers and messengers and warehousing and storage categories.
The overall October job gain, and a three-month average of 162,000 job additions per month, are consistent with 2.5% to 3% percent economic growth in the fourth quarter, with steady consumer spending, better business investment and a likely Federal Reserve December interest rate hike, according to John E. Silvia, chief economist at Wells Fargo Securities.
He noted after the strongest monthly gain of the expansion, average hourly earnings growth stalled in October.
“The weak read stemmed in part from the rebound in leisure and hospitality employment, which pays the lowest average wages among major industries,” Silvia said. “Wages also edged down or slowed across a range of industries, including construction and education and health services. Compared to last October, average hourly earnings are up only 2.4% versus a 2.7% year-ago pace this time in 2016. Despite the setback last month, we still expect to see average hourly earnings strengthen in the coming months.”
The report follows one two days earlier from payroll processor ADP thatreported 235,000 private sector jobs were added in October, its best performance since March. The September total of jobs added was revised down from 135,000 to 110,000.
“The job market rebounded strongly from the hit it took from Hurricanes Harvey and Irma. Resurgence in construction jobs shows the rebuilding is already in full swing. Looking through the hurricane-created volatility, job growth is robust,” said Mark Zandi, chief economist of Moody’s Analytics, about the ADP report.
Factory Orders Still Strong, Business Investment Best in a Year
The report was released on the same day as one from the Commerce Department that showed new orders for factory made goods in September increased 1.4%, the third hike in the past four months and slightly better than Wall Street expectations.
Shipments of factory made goods also moved higher for ninth months out of the past 10, adding 0.8% in September from August.
Orders for non-defense capital goods minus aircraft, an indicator of business investment, surged 1.7% in September, following a preliminary report that showed a 1.3% gain from the month before. The revised performance marked the biggest gain in a year.
“The fundamentals for the factory sector, highlighted by capital goods, are very positive,” said analysts at Econoday. “The gains for core capital goods shipments are a boost for [nation’s] gross domestic product.”
The performance for the factory sector was not surprising following a Commerce Department report a couple of days earlier that showed the nation’s GDP, the widest measure of how the economy is performing, grew at an annual rate of 3% in the third quarter, following a 3.1% rate in the second quarter, its best six-month showing in three years.
Looking into the final quarter of the year, factory activity has started out good, according to reports issued a few days earlier for October.
This and other factors, such as indications of increasing car sales, upcoming holiday retail sales, and even some increased home building, is fueling speculation among some analysts that the final quarter of the year will be as good, if not better, than the two previous quarters.