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Financial News: U.S. Job Growth Far Exceeds Economist Estimates In

U.S. Job Growth Far Exceeds Economist Estimates In October

11/01/2019 - 09:25:00 (RTTNews)

(RTTNews) - Even with a strike by workers at General Motors (GM) weighing on manufacturing employment, the Labor Department released a report on Friday showing much stronger than expected U.S. job growth in the month of October.

The Labor Department said non-farm payroll employment climbed by 128,000 jobs in October compared to economist estimates for an increase of about 89,000 jobs.

The report also showed substantial upward revisions to job growth in September and August, with revised data showing employment jumped by 180,000 jobs and 219,000 jobs, respectively.

With the upward revisions, employment gains in September and August combined were 95,000 more than previously reported.

"The upshot is that the three-month average gain is now 175,000, which is easily enough to outpace population growth," said Michael Pearce, Senior U.S. Economist at Capital Economics.

He added, "That is in stark contrast with much of the recent survey evidence, which had pointed to a sharp slowdown in employment growth."

Despite the stronger than expected job growth, the report said the unemployment rate inched up to 3.6 percent in October from 3.5 percent in September. The uptick matched economist estimates.

The unemployment rate crept up from the nearly 50-year low hit in the previous month as a 325-person jump in the size of the labor force more than offset a 241,000-person increase in the household survey measure of employment.

The Labor Department said the job growth in October reflected notable job gains in food services and drinking places, social assistance, and financial activities.

Meanwhile, the report showed a loss of 36,000 manufacturing jobs due to the strike at GM, while government employment edged lower amid a drop in the number of temporary jobs for the 2020 Census.

Wage growth remained tame despite the stronger than expected job growth, with average hourly earnings edging up by 0.2 percent to $28.18 in October. Average hourly earnings were up by 3.0 percent year-over-year.

"The strength of this report, together with the news earlier this week of a slightly stronger-than-expected 1.9% annualized gain in third-quarter GDP, would seem to support the Fed's shift to a more neutral policy stance," Pearce said.

He added, "Nevertheless, given the continuing weakness in the survey evidence - and with the knowledge that these employment figures are likely to be revised down significantly when the annual benchmark revision is incorporated early next year - the Fed may not be done yet."

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