Senior Economist Alvin Liew at UOB Group’s Global Economics & Markets Research reviewed October’s Nonfarm Payrolls released on Friday.
Key Quotes
“The US nonfarm payrolls (NFP) increased for the 6th month in a row but the pace of adding jobs has been slowing, now at 638,000 in October (above Bloomberg median forecast of +539,000 jobs), a tad below the upwardly revised 672,000 recorded in September.”
“Even as job creation slowed, the unemployment rate continued to surprise on the downside by one full percent to 6.9% in October (from 7.9% in September, much lower than expectations of 7.6%), the lowest in 7 months, since April. The improvement in the jobless rate was despite of a rebound in the labor participation rate to 61.7% (from 61.4% in Sep).”
“The private sector (906,000 jobs) was again responsible for most /all of the jobs gains while the government subtracted another significant 268,000 jobs (from -220,000 in Sep), mainly due to a 147,000 reduction in temporary workers for 2020 census survey and continued job losses within local and state government education (-98,000 and -61,000, respectively).”
“The US employment situation has continued to improve post-April, accumulating more than 12 million payrolls increases between May and October, now making up for more than half of the 22 million job losses recorded in March and April combined. Total nonfarm employment continued to improve but was still 10.1 million (or 6.6%) lower than in February.”
“Adding to the economic peril is the uncertainty of further stimulus from the government, which may draw even more into the job market, thereby re-increasing participation rates. And with the job recovery showing a clear deceleration trend and a potentially further significant reduction in government jobs in coming months, we think the unemployment rate could inch back above 7% while the number of new jobs could drop below 500,000 as early as November.”
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