Total nonfarm payroll increased by 150,000 in October, according to the latest jobs report from the U.S. Bureau of Labor Statistics (BLS). The unemployment rate in October, 3.9%, was little changed from the rate in September. Additionally, the October report included downward revisions for job growth in both August and September. With the revisions, employment in August and September was 101,000 lower than initially reported by the BLS.
“The October jobs report was in line with what policymakers would like to see,” says Zonda chief economist Ali Wolf. “The U.S. economy still has added jobs but at a more tempered pace, and employees are still experiencing wage growth but not as strong as before. I think the Federal Reserve would be happy with their decision to pause this week after seeing the report.”
Job gains in October occurred in health care (+58,000), government (+51,000), and social assistance (+19,000), while employment declined in manufacturing (-35,000) due to strike activity.
Construction employment increased by 23,000 in October, with positive growth for specialty trade contractors (+14,000) and construction of buildings (+6,000). Doug Duncan, chief economist at Fannie Mae, says the “robust month of employment growth for specialty trade contractors will help alleviate supply constraints present in the sector.”
The number of unemployed persons, 6.5 million, also changed little in October but is up by 849,000 since April. The number of long-term unemployed—those jobless for 27 weeks or more—was roughly unchanged month over month at 1.3 million and accounted for 19.8% of all unemployed persons.
The labor force participation rate, 62.7%, and the employment-population ratio, 60.2%, changed little in October.
“Wages grew at a 4.1% year-over-year pace, continuing to decelerate from the peak values seen in 2022 and lessening the inflationary pressures present in the economy,” says Duncan.
The number of persons not in the labor force who currently want a job—not included in the unemployed count—was 5.4 million, little changed from the prior month.
“The number of workers who have a part-time job but who would prefer full-time employment rose by over 200,000 in October, all signs of a gradually slowing labor market,” Duncan says.
Among those not in the labor force who wanted a job, the number of persons marginally attached was also little changed at 1.4 million in October. These individuals wanted and were available for work and had looked for a job sometime in the past year, but not in the four weeks preceding the BLS Household Survey. The number of discouraged workers—a subset of the marginally attached who believed no jobs were available for them—was 416,000 in October.
Duncan says the report shows a “healthy but slowing labor market” and is not considered “consistent with continued robust inflationary pressures.”
“For the housing industry, the big thing is that bond yields came down following the [report],” says Wolf. “We are going into the weekend with mortgage rates closer to 7.5% than 8%.”
