October job numbers just came out, Andrew Flowers, Economist at Appcast provided some commentary;
- The U.S. labor market is reaccelerating. The October jobs report beat expectations by a massive margin: adding 165,000 jobs, about 100,000 above the consensus forecast. On the heels of the blowout midterm election results, we’ll cheekily call this the second “tsunami” of the week.
- The six-month moving average of job gains is at 83,000, which is far above the “break-even” rate to keep up with the (albeit subdued) labor force growth in recent years.
- Job gains were widespread. The so-called “diffusion index” – which measures the breadth of industries adding jobs, minus those contracting – rose to 60.4 on a three-month basis. So, effectively, 80% of industries are expanding payrolls.
- Professional and business service were up a shocking 70,000, and averaging gains of 36,000 over the past three months, a clear reversal in the narrative of lackluster white-collar hiring. Alongside a strong rise in software developer job postings over the past year, it’s worth considering that the cyclical downshift in job gains for “sitting-down” jobs might be at an inflection point.
- Healthcare added 55,100, a continuation of its stalwart growth in recent years.
- The other strong tailwind recently – the A.I. data center buildout – had a mixed showing. Manufacturing jobs were up 19,000. But utilities and construction both lost jobs on the month
- While transportation and warehousing gained nearly 25,000 jobs, it was mostly in the couriers and messengers category – so not A.I. related
- While the unemployment rate declined slightly to 4.1%, there is some area of concern that those without work are finding it difficult to land a job. The typical weeks unemployed is up to 11.9, the highest since 2014.
- Wage growth is picking up, with frontline workers seeing nominal increases of 3.3% year-over-year, but over the past three months that’s rising at an annualized rate of 4.1%. For construction workers, wage growth is accelerating.
- In conclusion, the labor market is more than holding its own. It’s expanding, and not just from healthcare and A.I. in this report. It’s possible the white-collar hiring freeze is at a turning point.