Job Market Resilient In October Despite GM Strike, Beating Expectations
U.S. employers added 128,000 jobs in October as the unemployment rate inched up to 3.6%.
Friday's report from the Labor Department suggests job growth remains resilient, despite the ongoing trade war and temporary setbacks like the United Auto Workers' strike at General Motors, which was settled a week ago.
Some 46,000 GM workers are now back on the job after 40 days on the picket lines.
"They were starting to feel a little bit of the pinch, but they're glad to be back," said Randy Freeman, president of UAW local 652 in Lansing, Mich. "They're glad to be working, and having this behind them, and going into the holiday season."
Job gains for August and September were also revised upwards by a combined 95,000.
"It's going to be one of those days. We're going to hang an asterisk on all the data," said Joseph Brusuelas, chief economist at the consulting firm RSM.
Job gains over the last three months have averaged about 176,000.
"We still have a very low unemployment rate and we should expect the economy to continue to add jobs at just above 100,000 [per month] throughout the remainder of this year and into early 2020," Brusuelas said.
The GM strike did take a bite out of manufacturing employment. Factories shed 36,000 jobs in October. Manufacturing has also suffered from slowing demand in the rest of the world as well as the president's trade war.
"That's what we call the uncertainty tax," Brusuelas said. "You start taxing the import of goods, you create enormous uncertainty about the direction of the economy."
Weak business investment has been a drag on economic growth. On Wednesday, the Commerce Department reported that the U.S. economy grew just 1.9% between July and September.
Eventually, that slower growth could become a drag on the job market and that in turn would cut into consumers' buying power. But Federal Reserve Chairman Jerome Powell told reporters this week he's not worried yet.
"That's a risk that we've been monitoring, but we don't see it yet," Powell said.
The central bank cut interest rates by a quarter percentage point on Wednesday to guard against further slowing. But Powell suggested that might be the last rate cut for a while, unless the economy worsens.
"Consumers are doing well and are focused on the good job market and rising incomes," he said. "That is the thing that is pushing the economy forward and it doesn't seem to have been affected so far by weakness in the other areas."
Labor force participation inched up by a tenth of a percent as hundreds of thousands of people joined the workforce.
Average wages over the last 12 months have increased 3%, a slight acceleration from the previous month. [Copyright 2019 NPR]
