October saw 128,000 jobs added to payrolls, well above expectations of around 80,000. September figures were revised upward from 136,000 to 180,000, indicating ongoing strength in the labor market. However, the unemployment rate ticked upward to 3.6%, and growth in the working-age population is shrinking.
Key Takeaways
- 128,000 jobs added in October vs. 90,000 expected and 180,000 the month before.
- The unemployment rate ticked upward, as expected, to 3.6% due to the impact of the General Motors strike.
- Hiring has slowed throughout 2019, and growth in the working-age population has also ticked downward considerably.
The unemployment rate has ticked upward from the 50-year low seen in September, with the General Motors strike taking 50,000 workers out of action. 36,000 manufacturing jobs were lost last month, largely due to the strike. GDP Growth has slowed from 2.9% to 1.9% this year, with personal consumption slowing from 2.5% to 2.9%. Growth in services has slowed from 3.4% to 1.7%, and business investment has plummeted from 13.7% to -1.5%. The New York Fed is projecting growth of just 0.92% for Q4 2019.
While unemployment remains low, the slowing economic growth which looks set to close out the year may cause companies to implement layoffs, which would in turn impact consumer spending and the wider economy. While initial jobless claims remain low, jobs growth in general has slowed down considerably to around 1.5% growth.
In non-impeachment news: Job creation in October exceeds expectations. Estimates for August & September revised significantly upward. Wages still rising; 3% over year. From CNBC: https://t.co/aAryjDcoKX pic.twitter.com/rB3lfDdUUO
— Byron York (@ByronYork) November 1, 2019
The trade war and worsening global conditions are factors in the slowdown, as well as a shortage of skilled labor. This represents a demographic shift in the US, with baby boomers reaching retirement age and birth rates decreasing. Retirees tend to spend less money, which may impact growth in the future. Hiring averaged at 167,000 per month in 2019 so far vs. 223,000 last year.
Market Reaction
Gold prices have seen little reaction to the news. Spot gold last traded at $1,509.67/oz, down -0.11% with a high of $1,514.92/oz and a low of $1,504.15/oz. Gold faced some selling pressure, but has remained trading above the crucial line of support at $1,500.
Gold Price Chart
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