October’s solid 165,000 job gain gives the Federal Reserve easier justification for a December hike.
On Nov. 6, the Bureau of Labor Statistics reported a gain of 165,000 nonfarm payroll jobs for October and revised the August number higher to 186,000 from 133,00 and the September number to 60,000 from 30,00.
Given the strong job numbers over the past three months and an unemployment rate hovering around 4.1%, the Federal Open Market Committee has cover to raise the federal funds rate by another 0.25% at its December meeting. Markets have predicted about an 80% chance of a hike.
The professional services sector reported the largest gain, with 70,000 new jobs, followed by transportation and warehousing (24,800), manufacturing (19,000), and financial activities (7,000).
Seasonal hiring ahead of the holiday season helped lift the transport and warehousing number, but most of October’s gains came from the professional and business services sector, according to the authors of an RBC Economics note. “Health care is losing its title as the primary driver of job growth (it’s led growth only once in the past four months), meaning the strength in the labor market continues to broaden.”
At the same time, part-time employment has skyrocketed to 4.8 million jobs in October, up from 339,000 jobs a month earlier.
“These individuals would have preferred full-time employment but were working part-time because their hours had been reduced or they were unable to find full-time jobs,” the BLS noted in its press statement.
Differing Numbers
Using its own methodology developed with the Stanford Digital Economy Lab, the authors of the ADP National Employment Report reported that private employers added 86,000 jobs in October.
“Employers of all sizes were hiring last month, and our data suggests that jobchangers were lured by a combination of bonuses, overtime, and more hours in addition to higher base pay,” said Nela Richardson, chief economist at ADP, in the report. “Taken together, earnings growth for these workers hit its fastest pace since March 2024.”
ADP reported that trade, transportation, and utilities added the most new jobs (39,000), while education and health services (28,000), leisure and hospitality (19,000), and financial activities (15,000) also posted significant gains. However, professional and business services recorded the largest job losses (27,000).
Rob Daly writes on the economy and fintech. You can reach him at rdaly@gfmag.com
