The U.S. economy added more new positions than expected last month, even as a strike at General Motors (GM) - Get Report impacting thousands of workers skewed the Labor Department's official monthly jobs tally.
Nonfarm payrolls rose by 128,000 in October, the Labor Department's Bureau of Labor Statistics reported on Friday, above economists' consensus forecasts of 89,500 new positions for the month. September's payrolls, meantime, were revised higher to 180,000 from an initially reported 136,000, while August's payrolls were also revised upward, to 219,000 from an initial 180,000.
With the revisions, employment gains in August and September combined were 95,000 more than previously reported, the Labor Department said. The unemployment rate inched up to 3.6% after touching 3.5% in September, the lowest since 1969. Average hourly earnings climbed 0.2% on a monthly basis and 3% year on year, matching economists' forecasts.
"A decent U.S. jobs report across the board," said CMC Markets analyst David Madden. "The labor market is strong, and workers are getting a nice increase in real wages."
Notable job gains occurred in food services, social assistance and financial activities, the report said, offsetting declines in manufacturing, particularly the auto sector, where employment in motor vehicles and parts decreased due to strike activity. Manufacturing employment decreased by 36,000 in October, with employment in motor vehicles and parts dropping by 42,000, reflecting strike activity, the government said.
Even before the GM strike, employment in auto manufacturing -- and in manufacturing more broadly -- had been tapering off. Last year's surge in manufacturing-related positions was a big reason why hiring accelerated in 2018. Without that support, employment growth eased in 2019, consistent with an economy that has expanded by 2% in recent quarters.
Stock jumped following the report on expectations that the U.S. economy continues to perform well, and that the Federal Reserve's recent rate cuts including its reduction this week will help assist in ensuring that continues.
"Between the better-than-expected job-gain number and the large revisions, this looks like a pretty strong report across the board," Jim Cramer and the Action Alerts PLUS team wrote following the report.
"While this report may confirm Fed Chairman Jerome Powell's cut and pause commentary from Wednesday, we think continued weakness in the manufacturing sector could justify another cut down the road. But all in, the strong print should squash concerns of an imminent recession."
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