A net 2.1 million new jobs were created in the 12-months ending October 2019 according to the U.S. Bureau of Labor Statistics, growing at a 1.4 percent compound rate, identical to the average annual compound rate for the past 40 years. October accounted for 128,000 net new jobs, with the unemployment rate rising from 3.5 percent in September to 3.6 percent. In comparison, the unemployment rate was 3.8 percent one year ago, 5.7 percent five years ago and 10.0 percent a decade ago.
Total employment is shown in the following graph on a seasonally adjusted basis.
Since a recession is defined as two consecutive quarters of a net decline in GDP, the U.S. is not in a recession at this time. The following shows GDP growth adjusted for inflation for the past three quarters. Q3 2019 GDP is the first of three estimates and thus is subject to two revisions. The first estimate exceeded most economist’s expectations.
3.1 Percent Q1 2019
2.1 Percent Q2 2019
1.9 Percent Q3 2019
Employment in the Leisure & Hospitality sector (in my opinion) has been an excellent proxy of the overall health index of the U.S. economy. People do not spend money on vacations, cruises, entertainment, spas or dinners out unless they feel good about the future economy. My premise is that the U.S. economic outlook is healthy as long as the employment growth rate in Leisure & Hospitality matches or exceeds that of the country overall. Current Leisure & Hospitality job growth in the prior 12 months was 2.4 percent versus 1.4 percent for the total economy. At this time I see no recession on the horizon, foregoing unanticipated economic shocks, given strong growth in Leisure & Hospitality employment. An event, however, could change that prognosis.
Not only are more people working than ever before in history in the U.S., those working have seen the largest increase in average hourly wages in a decade in 2019. Average hourly wage rose from $27.35 a year ago to $28.18 in October, a gain of 3.0 percent. In comparison, inflation (as indicated by the change in CPI – All Urban Consumers) was 1.7 percent.
The unemployment level varies by education attainment as shown in the table.
Other select items in the October 2019 jobs report:
- Number of Persons Unemployed for Less Than 5 Weeks rose by 100,000 from a month ago, and is now at 1.968 million versus 2.062 million a year ago (down 94,000)
- Long-Term Unemployed (jobless for 27 or more weeks) dropped by 50,000 versus September and is now at 1.264 million versus 1.370 million a year ago
- Civilian Labor Force Participation Rate is 63.3 percent, up from 62.9 percent a year ago – positive economic news
- Employment-Population Ratio is now 61.0 percent versus 60.6 percent a year ago – the bigger the better
- Number of Persons Employed Part Time for Economic Reasons (also known as involuntary part-time workers) are individuals desiring full-time employment but either had their hours cut back or cannot find a full-time job, declined by192,000 from one year ago and is down to 4.438 million compared to 4.630 million in 2018
- Marginally Attached to the Labor Force (not currently counted in the labor force, want and are available for work and had looked for a job in the prior 12 months) now at 1.229 million was at 1.491 million a year ago. Within that group, 341,000 were classified as Discouraged Workers – persons not currently looking for work because they believe there are no jobs available for them, down from 506,000 a year ago, a drop of 165,000 or 34.8 percent
The next table shows the job change (in thousands) for Employment SuperSectors. For example, Education & Health Services added 644,000 net new jobs in the past 12-months, 2.886 million in the prior 60 months) and made up 16.1 percent of all jobs. The largest percentage change in the prior five years was in Construction employment, which increased by 19.3 percent. SuperSector data are not-seasonally adjusted while all other data discussed are seasonally adjusted.
To read the press release from the BLS click https://www.bls.gov/news.release/pdf/empsit.pdf
Overall this was a very sound jobs report.