Employers add 214,000 jobs; unemployment rate dips to 5.8%
American employers added 214,000 jobs in October and helped the labor market reach its longest period of healthy growth in almost two decades.
The report released Friday by the Labor Department also showed the unemployment rate declined 0.1 percentage point to 5.8 percent last month, the lowest level since July 2008, as more workers entered the labor pool and were successful in finding jobs.
The job gains continue a trend of accelerating growth but contrasted with views of some voters who expressed frustration with the economy in recent midterm elections in which Republicans regained control of Congress.
Economists were encouraged by the report but saw signs of weakness that underscored voters’ frustrations. Wage growth, which Federal Reserve policymakers have cited as a concern, continues to be anemic.
Nevertheless, the expansion in October meant that employers have added at least 200,000 jobs for nine straight months — the longest such stretch since 1995. And a combined 31,000 more jobs were added in August and September than previously estimated. Employers have added an average of 222,000 jobs a month over the past year.
“We had another solid gain in employer payrolls,” said Ken Mayland, an economist at ClearView Economics LLC in Cleveland.
The government report also said the unemployment rate improved as the number of employed rose by 683,000 and unemployment edged downward. That’s a positive trend because some declines in previous months were caused by people who stopped looking for work and were not counted as unemployed.
“The rise in the household employment was a very strong number, up seven months in a row,” said Stuart Hoffman, chief economist at PNC Financial Services Group. “That’s a pretty healthy pace, the best we’ve seen in a while.”
Another positive sign was a rise in the average workweek at employers, which edged up 0.1 hour to 34.6 hours per week from September.
“That six minutes a week doesn’t look like a significant increase, but when you apply that to the entire workforce, it is the equivalent of 340,000 jobs, which is nothing to sneeze at,” Mayland said.
The missing ingredient in the report was “still very tepid” wage growth, PNC’s Hoffman said. Average hourly wages rose 3 cents in October to $24.57. That’s just 2 percent higher than the average wage was 12 months earlier and is barely ahead of the 1.7 percent inflation rate.
“The market has not yet generated a wage boost for the people who have jobs. We’re just not seeing much in the way of wage increases,” Hoffman said. “That may have been reflected in the outcome of the election.”
Elise Gould, an economist at the Economic Policy Institute in Washington, said, “Employers are holding all the cards.”
She said employers are seeing more workers than available jobs.
“For every worker they have, there are a lot more out there,” Gould said. “So employers don’t have to pay more to hire workers. The fact that a lot of voters were in favor of an increase in the minimum wage shows they think it is a real issue.”
A major positive for the economy, Hoffman said, is the decline in gasoline prices nationwide that is adding $10 or more a week to workers’ pockets.
“It’s going to shore a good holiday season. With the jobs gains, the drop in gas prices, the rise in stocks, and consumer confidence, if this isn’t a good holiday season, I don’t know what it will take,” he said.
PNC has estimated holiday shopping gains this year will be in the 4.0 to 4.5 percent range, up from 3.5 percent in 2013.
The government report said the improving jobs picture prompted more people to start looking for work last month. The labor force participation rate — the percentage of Americans who either have a job or are looking for one — rose in October to 62.8 percent, up 0.1 percentage point from September.
The number of long-term unemployed — people without a job for 27 weeks or more — was little changed at 2.9 million, or 32 percent of the 9 million unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.1 million.
The number of discouraged workers, those not looking for work because they believe no jobs are available for them, was 770,000, unchanged from a year earlier.
Lower-paying industries posted job increases. Retailers added 27,100, and restaurants, hotels and entertainment companies gained 52,000. Higher-paying industries also had gains, with manufacturing adding 15,000 jobs, transportation and shipping companies 13,300, and professional and business services, which includes accountants, engineers and other higher-skilled fields, 37,000.
John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or [email protected].