Employment rose by 128,000 in October according to the latest Employment Situation Summary from the Bureau of Labor Statistics. Fannie Mae Chief Economist Doug Duncan notes that this number accounts for net losses of 42,000 for motor vehicles and parts manufacturing, and what this means for the Fed’s rate decision.
“The average workweek held steady, and average hourly earnings growth was unchanged at 3.0% year over year, which should offset concerns of weakening personal income growth,” Duncan said. “In the household survey, the unemployment rate ticked up one-tenth this month but remains at historically low levels, and labor force participation increased as well, indicating workers are continuing to return from the sidelines. Based on this report, the Fed should be comfortable with its tone at the recent FOMC meeting in which it implied a more muted appetite for future rate cuts.”
With the increased number of jobs comes an increased volume of residential construction workers, notes First American Deputy Chief Economist Odeta Kushi. The solid jobs report is a reflection of strength in the housing market.
“More hammers means more homes, so October’s month-over-month gain of 2,900 residential construction jobs signals an increase in new home construction may be on the horizon, which would benefit home buyers and the housing market,” Kushi said in a statement. “Since the recession, housing starts per construction worker (construction productivity) has improved, but seems to have settled just above 1.4 housing starts per worker. The rise in construction jobs is good news for the housing market, as finding ways to increase the productivity of construction workers is critically important to alleviating the labor shortage challenge and the gap between household formation and home building.”
Americans are making more as well, according to U.S. Secretary of Labor Eugene Scalia.
"Once again, Americans are receiving more money in their paychecks, as year-over-year wage growth rose by 3.0%,” Scalie said. “Wages have grown at or above 3.0% for 15 straight months, including September's increased revision.”