October jobs report: probably the best report of the entire expansion

 - by New Deal democrat

HEADLINES:

• +250,000 jobs added
• U3 unemployment rate unchanged at 3.7%
• U6 underemployment rate declined -0.1% from 7.5% to 7.4% 

Here are the headlines on wages and the broader measures of underemployment:

Wages and participation rates

• Not in Labor Force, but Want a Job Now:  rose +72,000 from 5.237 million to 5.309 million   
• Part time for economic reasons: fell -21,000 from 4.642 million to 4.621 million 
• Employment/population ratio ages 25-54: rose +0.4% from 79.3% to 79.7%
• Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.07 from  $22.82 to $22.89, up +3.2% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.) 

Holding Trump accountable on manufacturing and mining jobs

 Trump specifically campaigned on bringing back manufacturing and mining jobs.  Is he keeping this promise?  

• Manufacturing jobs rose +32,000 for an average of +21,000/month in the past year vs. the last seven years of Obama's presidency in which an average of +10,300 manufacturing jobs were added each month.   
• Coal mining jobs fell -200 for an average of -8/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month

August was revised upward by 16,000. September was revised downward by -16,000, for no net change.

The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were mainly positive.

• the average manufacturing workweek fell by -0.1 hours to 40.8 hours.  This is one of the 10 components of the LEI.
• construction jobs rose by +30,000. YoY construction jobs are up +330,000.  

• temporary jobs rose by +3300. 
• the number of people unemployed for 5 weeks or less decreased by -8,000 from 2,065,000 to 2,057,000.  The post-recession low was set five months ago at 2,034,000.

Other important coincident indicators help  us paint a more complete picture of the present:

• Overtime was unchanged at 3.5 hours.
• Professional and business employment (generally higher-paying jobs) increased by +35,000 and  is up +516,000 YoY.
• the index of aggregate hours worked for non-managerial workers rose by +0.2%.

•  the index of aggregate payrolls for non-managerial workers rose by +0.5%.     

Other news included:            

• the  alternate jobs number contained  in the more volatile household survey increased by  +600,000  jobs.  This represents an increase of 2,748,000 jobs YoY vs. 2,516,000 in the establishment survey.    
• Government jobs increased by +4,000.

• the overall employment to population ratio for all ages 16 and up increased +0.2% from 60.4% m/m to 60.6% and is +0.4% YoY.          
• The labor force participation rate rose +0.2% from 62.7% to 62.9 and is up +0.2% YoY.

SUMMARY

This was probably the single best report of the entire expansion. The only flies in the ointment were a slight increase in people not in the labor force who want a job now, and a slight decline in the manufacturing workweek. The headline unemployment rate was unchanged at its expansion low.

Aside from that, virtually everything moved in the right direction, in many cases to expansion highs. For the first time, wages for ordinary workers grew over 3% a year. Participation increased across the spectrum. The headline job growth number was excellent, and the more volatile household survey trend was even better.

If this were a Presidential election year, this would be awesome news for the incumbent. Even in a midterm year, this certainly can't hurt as a closing economic argument for the majority party. Regardless of one's ideology, however, this was simply an excellent report.