October U.S. Employment Numbers Fall Short of Expectations

U.S. employers added 150,000 non-farm jobs in October on a seasonally adjusted basis, falling short of economist’s expectations. The unemployment rate ticked up to 3.9 percent from 3.8 percent in September based on a survey of households, the U.S. Bureau of Labor Statistics reported on Friday.

Many noted that the increase and the unemployment rate were in line with the pre-pandemic employment picture, and some wondered if the U.S. was getting back to normal.

The New York Times noted that the unemployment rate had been below 4 percent for nearly two years, a stretch not achieved since the late 1960s. 

Figures for August and September were also revised downward by more than 100,000 jobs from earlier monthly reports. The surprisingly strong September gain, initially reported as 336,000, was restated as 297,000 and will be revised again next month by the Labor Department.

The U.S. Bureau of Labor Statistics said job gains occurred in health care, government and social assistance. Employment declined in manufacturing due to strike activity. Read the full report below.

This report presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures non-farm employment, hours and earnings by industry.

Household Survey Data

Both the unemployment rate, at 3.9 percent, and the number of unemployed persons, at 6.5 million, changed little in October; however, since their recent lows in April, these measures are up by 0.5 percentage points and 849,000, respectively.

Among the major worker groups, the unemployment rate for adult men (3.7 percent), adult women (3.3 percent), teenagers (13.2 percent), Whites (3.5 percent), Blacks (5.8 percent), Asians (3.1 percent), and Hispanics (4.8 percent), showed little change in October.

Among the unemployed, the number of permanent job losers increased by 164,000 over the month to 1.6 million. The number of persons on temporary layoff changed little to 873,000.

In October, the number of long-term unemployed (those jobless for 27 weeks or more) had changed little, to 1.3 million. The long-term unemployed accounted for 19.8 percent of all unemployed persons.

The labor force participation rate, at 62.7 percent, and the employment-population ratio, at 60.2 percent, changed little in October.

The number of persons employed part-time for economic reasons, at 4.3 million, changed little in October. These individuals, who would have preferred full-time employment, worked part-time because their employers reduced their hours or they could not find full-time jobs.

In October, the number of persons not in the labor force who want a job was 5.4 million, a little different from the prior month. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force changed little to 1.4 million in October. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the four weeks preceding the survey. 

The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, also changed little over the month at 416,000.

Establishment Survey Data

Total non-farm payroll employment increased by 150,000 in October, below the average monthly gain of 258,000 over the prior 12 months. In October, job gains occurred in health care, government, and social assistance. Employment in manufacturing declined due to strike activity.

Health care added 58,000 jobs in October, in line with the average monthly gain of 53,000 over the prior 12 months. Over the month, employment continued to trend up in ambulatory health care services (+32,000), hospitals (+18,000) and nursing and residential care facilities (+8,000).

Employment in government increased by 51,000 in October and returned to its pre-pandemic February 2020 level. Monthly job growth in government averaged 50,000 in the prior 12 months. In October, employment continued to trend up in local government (+38,000).

Social assistance added 19,000 jobs in October, compared with the average monthly gain of 23,000 over the prior 12 months. Over the month, employment continued to trend up in individual and family services (+14,000).

In October, construction employment continued to trend up (+23,000), about in line with the average monthly gain of 18,000 over the prior 12 months. Employment continued to trend up over the month in specialty trade contractors (+14,000) and construction of buildings (+6,000).

Employment in manufacturing decreased by 35,000 in October, reflecting a decline of 33,000 in motor vehicles and parts mainly due to strike activity.

In October, employment in leisure and hospitality changed little (+19,000). The industry added an average of 52,000 monthly jobs over the prior 12 months.

Employment in professional and business services was little changed in October (+15,000), with little net change since May. 

Employment in temporary help services changed little over the month (+7,000) but was 229,000 below its peak in March 2022.

In October, employment in transportation and warehousing was little changed (-12,000) and showed little net change over the year. Over the month, warehousing and storage lost 11,000 jobs, while air transportation added 4,000 jobs.

Information employment changed little in October (-9,000). Employment in motion picture and sound recording continued to trend down (-5,000). The industry has lost 44,000 jobs since May, partially reflecting the impact of an ongoing labor dispute.

Over the month, employment showed little change in other major industries, including mining, quarrying and oil and gas extraction, wholesale and retail trade, financial activities, and other services.

In October, average hourly earnings for all employees on private non-farm payrolls rose 7 cents, or 0.2 percent, to $34.00 an hour. Over the past 12 months, average hourly earnings increased by 4.1 percent. In October, average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents, or 0.3 percent, to $29.19. an hour.

The average work week for all employees on private non-farm payrolls was down by 0.1 hours to 34.3 hours in October. In manufacturing, the average work week changed little at 40.0 hours, and overtime edged down by 0.1 hours to 2.9 hours. 

The average work week for production and nonsupervisory employees on private non-farm payrolls edged down by 0.1 hours to 33.7 hours.

The change in total non-farm payroll employment for August was revised down by 62,000, from +227,000 to +165,000, and the change for September was revised down by 39,000, from +336,000 to +297,000. With these revisions, employment in August and September combined was 101,000 lower than previously reported.