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MNI DATA IMPACT: US Oct Job Growth Surprises; U-Rate 6.9%

MNI (Washington)
WASHINGTON (MNI)

U.S. unemployment fell by more than expected in October even while monthly payrolls growth remained relatively stagnant at 638,000, the Bureau of Labor Statistics reported Friday.

The unemployment rate in October fell by a full percentage point, dropping to 6.9% from 7.9% in September when markets had been much more conservative, forecasting a decline to 7.6%.

Total nonfarm payrolls slowed from 672,000 in September, but beat market expectations for a smaller gain of 593,000. Payrolls would have been even higher if not for a loss of nearly 150,000 temporary 2020 Census workers last month.

Despite positive headline figures, the median duration of unemployment grew to 19.9 weeks from 18.2 weeks in September, pushing up the number of long-term unemployed, or unemployed workers without a job for more than six months, by 1.2 million to 3.6 million. Long-term unemployment in October accounted for 32.5% of the total unemployed, the BLS said.

Permanent job losers rose to 3.7 million in October, relatively unchanged from September but still 2.4 million higher than February. The U-6 rate, a broader measure of joblessness that accounts for discouraged workers, fell by a smaller margin to 12.1% from 12.8% in September.

The employment-population ratio increased 0.8 pp to 57.4% in October, and the labor force participation rate rose to 61.7% from 61.4% in September.

The length of the average work week held steady at 34.8 hours. Average earnings grew by 0.1% in October, below forecasts for a 0.2% gain. From a year earlier, earnings were up 4.5%, mainly due to job losses for lower paid workers.

Payrolls Hold Steady

Nonfarm employment in October was down 10.1 million, or 6.6%, from February, the BLS said.

Net revisions for the previous two months were a positive 15,000, the BLS said, bringing the three-month average increase to roughly 934,000. Just over half of the 22 million jobs lost in March and April have been recovered.

Total private payrolls rose 906,000 in October, above expectations for a 685,000 gain. That was driven by gains in service-producing industries like leisure and hospitality (+271,000) and professional and business services (+208,000), with a 108,700 increase in temporary help services payrolls accounting for roughly half of that gain.

Government payrolls fell by a larger-than-expected 268,000 in October after falling 220,000 in September.

The BLS said a misclassification error that has skewed unemployment figures since March was essentially nonexistent in October, and would have pushed up the reported rate of unemployment by only 0.3 percentage points at most.
MNI Washington Bureau | +1 202-371-2121 | brooke.migdon@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | brooke.migdon@marketnews.com

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