A blowout jobs number for October crosses the tape this morning, with 250K new jobs reported by the Bureau of Labor Statistics (BLS), the government survey that reports non-farm payrolls. The Unemployment Rate stayed constant at 3.7%, which remains around 50-year lows. Over the past 3 months, average jobs growth comes to 218K - extraordinarily strong for any era in American history, let alone one so far into its growth cycle.
Revisions for the past 2 months exactly cancel each other out: -16K for September and +18K for August, to 118K and a whopping 286K, respectively. Not one sector posted negative jobs growth for October, partly which filled in hurricane-related losses in Retail and other areas. In fact, we might consider this 250K a pop from hurricane losses in general, with the Private Sector having brought the lion's share of these jobs to the tally: 246K.
Speaking of hurricanes, one curious statement was included in this morning's BLS report, and that is that Hurricane Michael - the furious storm that ripped through the Florida panhandle and inland through Georgia and elsewhere - had "no discernible impact" on jobs last month. Perhaps this should be taken at face value, perhaps we may expect some sort of future revision regarding it.
Average Hourly Earnings, the metric closely watched by analyst seeking evidence of growing inflation entering the domestic economy - including, quite importantly, members of the Federal Open Market Committee (FOMC) who decides on interest rate levels - rose another 0.2%, or 5 cents, to an average of $27.30. This represents a 3.1% year-over-year gain, the highest monthly jump since April 2009.
The Labor Force Participation Rate also grew to 62.9%, a rise of 0.2% month over month. The U-6 read, aka "real unemployment," slipped further to 7.4% - another historically low figure. Leisure & Hospitality bounced back from its hurricane-related losses a month ago to 42K new jobs in October, whereas typical jobs sector leader Healthcare brought 36K. Manufacturing jobs, the hallmark of the "Trump economy" to this point, saw growth of 32K new jobs last month. This reverses two straight months of negative Manufacturing jobs totals.
In short, today's BLS jobs report performs outstandingly well both from an outside view and checking under the hood. The robust economic environment has long been powered by significant jobs growth, and it is somewhat surprising we see no evidence of this slowing down. The only possible dark cloud for this very sunny report is that chances of the FOMC pausing on raising interest rates at its meeting next month are likely falling toward nil.
Q3 earnings reports also continue to be reported ahead of today's opening bell: ExxonMobil XOM posted a resounding earnings and revenue beat after 3 straight quarters of earnings misses, beating bottom-line expectations by 20% and revenues by 5.7%; Exxon competitor Chevron CVX outperformed by 2.4% on the bottom line and 2.8% on the top line; and Chinese e-commerce major Alibaba BABA surpassed estimates on its bottom line while missing on the top, and the company has cut revenue guidance, citing "global macro-China uncertainty."
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