Hiring slowed in October, but there are many unfilled jobs. Here are the five things we learned from U.S. economic data released during the week ending November 3.
Payroll growth slowed but remained robust in October. Nonfarm payrolls expanded at a seasonally adjusted 150,000, nearly half of September’s 297,000 gain. The Bureau of Labor Statistics indicates the private sector added 99,000 workers, well below September’s 246,000 count. While health care/social assistance added 77,200 workers and government payrolls swelled by 51,000, strikes led to a 33,200 drop in motor vehicle/parts employment. Average weekly earnings of $1,116.20 was up 3.3 percent from a year earlier.
The separate household survey finds the unemployment rate edging up 1/10th of a percentage point to 3.9 percent. 201,000 people departed the labor force, leaving the labor force participation rate at 62.7 percent (off 1/10th of a percentage point). The 25-54 labor force participation rate fell by 2/10ths of a percentage point to 83.3 percent. The typical length of unemployment narrowed by 0.3 weeks to 8.9 weeks. The number of part-time workers desiring a full-time opportunity grew by 199,000 to 2.982 million. The U-6 series, the broadest measure of labor underutilization, increased by 2/10ths of a percentage point to 7.2 percent.
Job openings increased in September. The Bureau of Labor Statistics estimates there were a seasonally adjusted 9.553 million unfilled jobs, up 56,000 from August 2023 (but down 12.0 percent from a year earlier). Private sector employers reported having 8.570 million job openings (+137,000 versus August 2023 and -12.4 percent versus September 2022). Industries with over a million open positions were leisure/hospitality, education/health services, and professional/business services. Employers hired 5.850 million workers, up 21,000 for the month but off 5.7 percent from a year earlier. Meanwhile, 5.530 million people separated from their jobs, down 157,000 from August and 4.8 percent from a year earlier. This included 3.661 million people who quit (matching August’s total but down 9.9 percent from a year earlier) and 1.517 million laid-off workers (down 165,000 from August but up 5.6 percent from September 2022).
The Fed leaves on the brakes. The policy statement released following this past week’s Federal Open Market Committee (FOMC) meeting nearly matched that of the mid-August meeting. It noted a “strong pace” of economic expansion, “moderated” job gains, and inflation that “remains elevated.” To the last point, the FOMC “remains highly attentive to inflation risks” and reaffirmed (again) its two percent inflation target. With all of this in mind, the Committee voted unanimously to keep the fed funds rate at 5.25-5.50 percent and to continue reducing the Fed’s holdings of Treasury and real estate-backed securities. There is one final FOMC meeting in December.
Purchasing managers reported turbulence in October. The Institute for Supply Management’s Manufacturing PMI lost 2.3 points to 46.7. Not only has the measure remained below 50 (the threshold between an expanding and contracting manufacturing sector) for 12 consecutive months, the index dropped to a three-month low. Indices fell for new orders, production, employment, and inventories, with only production staying above 50 during the month. Among 18 tracked industries, only food/beverage and plastics/rubber products reported growing during the month. The press release noted that “demand remains soft.”
The Services ISM dropped 1.8 points to 51.8, the lowest mark for the Institute for Supply Management measure since May. Despite the drop, the Services ISM has been above 50 for ten straight months. Falling were indices for business activity/production, employment, and inventories. The new orders index improved during the month. Twelve of 18 service sector industries expanded in October, led by arts/entertainment/recreation, retail, and construction. The press release highlighted some survey respondents’ concerns about “inflation, interest rates and geopolitical events.”
Factory orders surged in September. The Census Bureau reports that new orders for manufactured goods swelled 2.8 percent to a seasonally adjusted $601.5 billion. Orders have totaled $5.244 trillion over the first nine months of 2023, up 0.7 percent over last year’s comparable months. Transportation goods orders rose 12.7, boosted by civilian aircraft and motor vehicles. New orders net of transportation goods grew a healthy 0.8 percent. Shipments increased 0.4 percent to $588.1 billion—the year-to-date total of $5.210 trillion was 0.4 percent above last year’s pace. Unfilled orders jumped 1.4 percent to $1.354 trillion, while inventories expanded 0.2 percent to $857.3 billion.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending October 28, 2023, First-Time Claims, seasonally adjusted): 217,000, +5,000 vs. the previous week, +13,000 vs. the same week a year earlier). 4-week moving average: 210,000 (+3.8% vs. the same week a year earlier).
- Conference Board Consumer Confidence Index (October 2023, Index (1985=100), seasonally adjusted): 102.6 (September 2023: 104.3; October 2022: 102.2).
- Vehicle Sales (October 2023, Automobiles and Light Trucks, seasonally adjusted annualized rate): 15.497 million (-1.2% vs. September 2023; +5.6% vs. October 2022).
- Construction Spending (September 2023, Value of Construction Put in Place, seasonally adjusted annualized rate): $1.997 trillion (+0.4% vs. August 2023; +8.7%. vs. September 2022).
- FHFA House Price Index (August 2023, Purchase-Only Index, seasonally adjusted): +0.6% vs. July 2023; +5.6%. vs. August 2022.
- S&P/Case Shiller Home Price Index (August 2023, National Index, seasonally adjusted): +0.6% vs. July 2023; +2.6% vs. August 2022.
- Productivity (2023Q3-Preliminary, Nonfarm Business Labor Productivity, seasonally adjusted annualized rate): +4.7% vs. 2023Q2; +2.2% vs. 2022Q3.
- Agricultural Prices (September 2023, Prices Received by Farmers, not seasonally adjusted): -2.9% vs. August 2023; -2.9% vs. September 2022.
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What We Learned About the U.S. Economy Last Week 