USA added a solid 128,000 jobs in October despite GM strike

USA added a solid 128,000 jobs in October despite GM strike

USA added a solid 128,000 jobs in October despite GM strike

"Total nonfarm payroll employment increased by 128,000 in October". Although some firms reported higher input prices stemming from the ongoing impact of tariffs, many suggested that subdued price pressures were often linked to price drops at suppliers, notably for metals.

The healthy employment gains reassured investors amid uncertainty around the trade war between the United States and China and talk of a looming economic slowdown. While the overall employment-to-population ratio (EPOP) was unchanged at a recovery high of 61.0 percent, the EPOP for prime-age workers (ages 25 to 54) rose 0.2 percentage points to 80.3 percent, a new high for the recovery. In October 2009, the panel was expanded further to cover the entire manufacturing sector. But even as consumers help boost growth, business investment has been a drag on the economy in recent months. This was a fact that was reiterated by Federal Reserve Chairman Jerome Powell in his announcement of lower interest rates on October 30.

"The strength of this report, together with the news earlier this week of a slightly stronger-than-expected 1.9 percent annualized gain in third-quarter GDP, would seem to support the Fed's shift to a more neutral policy stance", Capital Economics senior USA economist Michael Pearce observed in a note to clients. The economy grew at a 2.0% pace in the April-June quarter.

With the labor market steadily pushing up wages, consumers are likely to continue carrying the economy.

General view of M&S Food Industries Sdn Bhd in the Silibin Industrial Area in Ipoh October 3, 2019. Wage growth peaked at 3.4% in February.

Though the household survey from which the unemployment rate is derived treated the striking workers as employed, the jobless rate increased to 3.6% in October, from near a 50-year low of 3.5%. The unemployment rate for Black people fell to 5.4 percent, another record low.

The only way to secure further large increases in employment would be for the "participation rate" (working-age adults actively wanting positions) to climb dramatically.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), said: "A minor uplift in overall purchasing activity did little to ease the agony for manufacturing companies in October, as the sector remained submerged in contraction terrain and heading for recession". Manufacturing is struggling under the weight of trade tariffs, which the White House has argued are meant to boost the sector.

Job losses were seen for the seventh consecutive month in October, with the rate of decline among the steepest over the past decade.

"The strike is now over, so November private payrolls will rebound, but the trend is slowing as businesses cut back on hiring in the face of uncertainty over trade policy", said Ian Shepherdson, the chief economist at Pantheon Macroeconomics.

Jobs in companies and agencies providing social assistance services increased by 20,000 last month, a higher than normal increase.

Another factor that temporarily slowed down the hiring process last month was the U.S. Census, where the government has relieved 20,000 short-term workers who had been helping prepare for the 2020 survey, AP News reports.

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