U.S. posts better-than-expected October jobs numbers despite GM strike

U.S. employers added a solid 128,000 jobs in October, a figure that was held down by a now-settled strike against General Motors that caused several thousand workers to be temporarily counted as unemployed.

The increase in hiring last month easily topped the 75,000 to 85,000 jobs forecast by most economists and analysts.

The Labor Department also said Friday that the unemployment rate ticked up from 3.5% to 3.6%, still near a five-decade low. For a second straight month, average hourly wages rose 3% from a year ago.

The GM strike contributed to the loss of 41,600 auto factory jobs in October. But the settlement will likely lead to a rebound in the coming months. The report revised upward job gains in the prior two months by a combined 95,000, suggesting a healthier job market than initially believed. Revisions for previous months showed an additional 51,000 jobs for August and an additional 44,000 for September,

Still, hiring has slowed this year. Gains averaged just 167,000 in the past 10 months, down from a monthly average of 223,000 in 2018, according to Labor Department figures.

Even so, job growth, remains high enough to keep the unemployment rate from rising in an otherwise mostly lackluster economy. On Wednesday, the government estimated that the economy grew in the July-October quarter at a modest 1.9% annual rate.

Surveys suggest that employers have turned cautious in large part because of heightened uncertainties caused by President Donald Trump’s trade conflicts. The president has imposed tariffs on many goods imported to the U.S., and other nations have retaliated with import taxes on U.S. exports.

One result is that companies, especially in manufacturing, construction and retail but also in some other sectors, have slowed their hiring or have stopped hiring altogether.

Still, consumers, who drive about 70% of U.S. economic activity, have remained generally resilient. In September, they modestly stepped up their spending, and their incomes grew fast enough to let them save more, too. A rising saving rate is encouraging because it suggests that households have leeway to keep spending and supporting an economic expansion that has entered a record-breaking 11th year.

At the same time, businesses have been a drag on the economy in recent months. Collectively, they have slashed their spending on industrial machinery and other equipment, mostly because the U.S.-China trade war has made them reluctant to commit to big purchases. The tariffs between the U.S. and China, the world’s two largest economies, have also reduced U.S. exports.

October is the usual start of hiring for the holiday shopping season. But the rise of e-commerce and increasing concentration of wealth in large U.S. metros have corresponded with the loss of more than 70,000 jobs at retailers this year. This trend could further diminish hiring by the retail sector.

Sluggish pay growth is another source of concern. The low unemployment rate and a shortage of qualified workers in many industries have nevertheless failed to accelerate wages across the job market as traditional economy theory would suggest.

Still, data tracked by the jobs site Glassdoor indicates that wage gains should start to rebound as companies continue to compete for workers in the hottest job markets.

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