Nonfarm employers added 250,000 jobs, the unemployment rate held steady at 3.7 percent, and hourly wages posted strong growth in October. The strong growth in the month was largely a bounce back from a hurricane-weakened September gain of 118,000 jobs (revised down from the initial release of 134,000). The three-month average is 218,000 jobs, roughly in-line with growth over the last four years.
Job gains occurred across a broad range of sectors in October including health care, manufacturing, construction, professional and business services, and transportation and warehousing. Health care added 36,000 jobs. Employment in manufacturing increased by 32,000, with durable goods dominating. Construction employment rose by 30,000, with nearly half the gain in residential specialty trade contractors. Professional and business services continued its growth trend, adding 35,000 jobs. Transportation and warehousing added 25,000 jobs in October. Professional and business services (adding 516,000 jobs over the last 12 months) and health care (431,800) continued to be the biggest drivers of job growth; with solid gains over the year coming from construction and manufacturing.
While the unemployment rate was unchanged in October, the strong labor market is pulling more people into the labor market. The employment rate—or employment-to-population ratio (EPOP or the percentage of adults with jobs) rose 0.2 percentage points to 60.6, a new high for the recovery. The increased EPOP showed particular strength for prime-age workers (ages 25-54) with a gain of 0.4 percentage points to 79.7 percent.
The tighter labor market is showing some dividends in wage growth. The average hourly wage is up 3.1 percent over the last year—topping 3 percent for the first time since the recession. On a weekly basis, wages increased by an even stronger 3.4 percent.
In sum, this is a positive jobs report. The pace of job growth that began seven years ago is continuing, with the economy adding 2.1 million jobs during the first 10 months of the year. This growth rate is pulling more workers into the labor market, which is now tight enough to produce wage gains.
The full BLS press release on the October 2018 employment situation can be accessed in the link below:
The next employment situation report for November 2018 will be released on Friday, December 7, 2018.
Real gross domestic product (GDP) increased at an annual rate of 3.5 percent in the third quarter of 2018, according to the advance estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2 percent. The second estimate for the third quarter, based on more complete data, will be released on November 28, 2018.
The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures, private inventory investment, state and local government spending, federal government spending, and nonresidential fixed investment that were partly offset by negative contributions from exports and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP growth in the third quarter reflected a downturn in exports and a deceleration in nonresidential fixed investment. Imports increased in the third quarter after decreasing in the second. These movements were partly offset by an upturn in private inventory investment.
View the full release at the pdf below.
The second estimate for the third quarter, based on more complete data, will be released on November 28, 2018.
On October 16, 2018, the State of Vermont released state revenue results for the month of September and the first quarter of Vermont’s 2019 fiscal year. Administration Secretary Susanne Young noted that revenue results were generally upbeat versus the State’s consensus cash flow targets and year-earlier collection levels for sources that were not adversely impacted by the end of the month of September falling on a weekend. Click the pdf below to view Secretary Young’s press release.
According to the Bureau of Labor Statistics, the Consumer Price Index for all urban consumers (CPI-U) increased 0.1 percent in September of 2018 on a seasonally-adjusted basis. An increase in the index for shelter was the main contributor to the monthly increase.
Excluding the volatile food and energy categories, prices increased by 0.1 percent in September. The indexes for apparel, motor vehicles insurance, recreation and airline fares increased in September while prices for used cars and trucks and new vehicles both declined.
After a build-up in inflation through much of the year, consumer price pressures moderated in September; a positive sign for workers who have seen larger paychecks mostly eaten up by price increases. From a year earlier, prices rose 2.3 percent, a slowdown from the 2.7 percent gain in August. Core inflation rose 2.2 percent from a year earlier, the same rate as in August.
The full press release can be found via the link below.
Next release is Wednesday, November 14, 2018, for the October 2018 Consumer Price Index.
The Nobel Prize in Economics for 2018 was awarded to Paul Romer and William Nordhaus for work on economic growth, technological change and climate change. Here are some links from nobelprize.org: