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Another Solid Jobs Report

The Employment Situation Report (also called the Non-Farm Payroll Report) gives a monthly snapshot of the employment (and unemployment ) situation in the US. It is considered by many to be the most important economic release every month. It is broken down for private and government job gains and losses, hours worked, and wage changes and the extended report also includes demographic information.

The 'Jobs' report for October 2019 was solid if not spectacular at 128,000 newly employed especially given the GM strike subtracting about 40,000 and the revisions to the 2 prior months adding 95,000 jobs.

The overall number was better than expected, but wages slightly lagged expectations. There was surprising strength in private company payrolls and weakness in government payrolls, but the 'government' weakness could be caused by something like the modeling of teachers returning to work where it was net add in the previous number making a net subtraction in Oct (seasonal smoothing is used in this number to decrease its volatility).

The internals shows a new low in the unemployment rate for Blacks (5.4%) while other groups also matched or were within .1% of historic levels.

While Manufacturing employment fell by 36,000, the GM strike drove the motor vehicle and parts jobs down 42,000 - in other words, there would have been a 6,000 job gain in manufacturing if not for the GM strike. We've noted the stabilization of manufacturing and small employment growth increases in the Federal Reserves Regional Business Surveys, so that wasn't too surprising.

The level of wage increases has slowed from earlier in the year, but if (a BIG if) the China trade deal gets done and with 7,000,000 unfilled jobs reportes in the JOLTS survey we should see some improvement there going forward. Given the very low level of inflation, wage increases could also add to retail spending by consumers should wage increases materialize.

Like the GDP report a few days ago, the Jobs report points to solid and continued growth.

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