The Atlanta Journal-Constitution
3 things to know about the economy
Recent reports, including two on Friday, paint a picture of an economy that has decelerated a bit from 2018’s strength but doesn’t appear close to dipping into a recession, despite recent fears.
JOBS
The United States added 128,000 jobs in October as the jobless rate ticked up to 3.6 percent, which was below recent averages but signaled that the labor market remains resilient and healthy.
MANUFACTURING
The economy still faces challenges. Data from the Institute for Supply Management showed that the manufacturing sector contracted in October for the third straight month.
MARKETS
The jobs data lifted two Wall Street indexes, the S&P 500 and the Nasdaq, to record levels. The Dow Jones Industrial Average closed near a record, rising more than 300 points.
What happened
The economy managed to add 128,000 jobs last month even though tens of thousands of workers were temporarily counted as unemployed because of the now-settled strike against General Motors. What’s more, the government revised up its combined estimate of job growth for August and September by a robust 95,000.
Though the unemployment rate ticked up from 3.5% to 3.6% in October, it’s still near a five-decade low.
And for a second straight month, average hourly wages rose a decent, if less than spectacular, 3% from a year ago.
What it means
The report from the Labor Department suggested that the economy has enough strength to keep expanding despite the threats from overseas, political tensions at home, a downturn in manufacturing and a chronic gap between the wealthiest Americans and everyone else.
The healthy level of hiring also makes it less likely that the Federal Reserve, which cut short-term interest rates this week for a third time this year, will do so again anytime soon.
“This was an unambiguously strong report,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.
Friday’s jobs report also raised the prospect of further job growth to come. The settlement of the GM strike, which contributed to the temporary loss of 41,600 auto factory and likely other related jobs last month, seems sure to lead to a return of those jobs in coming months.
In addition, the labor force participation rate, a gauge of how many adults either have a job or looking for one, reached 63.3%, the best since 2013. That suggests that a rising number of people continue to think it’s a good time to find a job.
Besides GM, a temporary drag on hiring last month was the U.S. Census. The government let go of 20,000 shortterm workers who had been helping prepare for the 2020 survey.
Job growth so far this year has averaged 167,000 a month, down from an average of 223,000 in 2018, according to Labor Department figures. Even so, hiring remains high enough to keep the unemployment rate from rising even as overall growth has become more tepid. On Wednesday, the government estimated that the economy grew in the July-October quarter at a modest 1.9% annual rate.
The hot job market is spurring many employers to raise wages to attract and retain workers. Yet those gains may not always leave workers feeling better off as they grapple with high housing, transportation, health and education expenses.
What’s next
Friday’s jobs report hinted at a mixed picture for the start of the holiday shopping season. Retailers added 6,100 jobs last month. But the rise of e-commerce and an increasing concentration of wealth in large U.S. metros have corresponded with the loss of more than 20,000 jobs at retailers over the past 12 months.