Job creation took the month off. Here are the five things we learned from U.S. economic data released during the week ending November 1.
Hurricanes and strikes partially explain October’s pause in payroll growth. Nonfarm payrolls grew by a puny 12,000 jobs, the smallest gain for the Bureau of Labor Statistics (BLS) measure since December 2020. The BLS also downwardly revised its August and September payroll estimates by a combined 112,000. Private sector payrolls contracted by 12,000. Adding the most jobs were health care/social assistance (+51,300) and the government (+40,000). Reporting payroll declines were temporary help services (-48,500), manufacturing (-46,000), retail (-6,400), leisure/hospitality (-4,000), transportation/warehousing (-3,700), and utilities (-1,700). The Boeing strike and hurricanes Helene and Milton weighed heavily on the payrolls data. Average weekly earnings of $1,216.28 represented a 4.0 percent gain from a year earlier.
Based on a separate household survey, the unemployment rate held steady at 4.1 percent. The labor force contracted by 220,000, leading to a 1/10th of a percentage point drop in the labor force participation rate to 62.6 percent. The 25-54 year old participation rate fell by 3/10ths of a percentage point to 83.5 percent. The median unemployment length increased by 1/10th of a week to 10.0 weeks (October 2023: 8.6 weeks). The number of people with a part-time job “for economic reasons” declined by 81,000 to 4.557 million. The broadest measure of labor underutilization was unchanged at 7.7 percent.
Economic growth slowed slightly in Q3. Real Gross Domestic Product (GDP) grew at a seasonally adjusted annualized rate (SAAR) of 2.8 percent. The Bureau of Economic Analysis (BEA) measure had risen 3.0 percent during Q2. Driving Q3 economic expansion was consumer spending, responsible for 246 basis points of GDP growth. Other positive GDP contributors were (in descending order) exports (+94 basis points), federal government spending (+60 basis points), fixed nonresidential investment (+46 basis points), and state/local government spending (+25 basis points). Drags on the U.S. economy were imports (-149 basis points), fixed residential investment (-21 basis points), and the change in private inventories (-19 basis points). The BEA will update its Q3 GDP data twice over the next two months.
Consumer spending picked up in September. Real Personal Consumption Expenditures (PCE) increased by a seasonally adjusted 0.4 percent, double August’s 0.2 percent gain. Goods expenditures rose 0.7 percent (with gains for durables and nondurables of 0.4 percent and 0.8 percent, respectively). Services spending advanced 0.2 percent. Without adjustments for inflation, nominal PCE gained 0.5 percent, funded by a 0.3 percent increase for both nominal personal income and nominal disposable income. Real disposable income inched up 0.1 percent. The savings rate slipped by 2/10ths of a percentage point to +4.6 percent. Over the past year, real PCE and real disposable income both have increased 3.1 percent. The same Bureau of Economic Analysis report has the PCE Price Index rising 0.2 percent in September and 2.1 percent over the past 12 months. Removed both energy and food has the core PCE Price Index gaining 0.3 percent for the month and 2.7 percent over the past year.
The number of job openings shrank as hiring picked up in September. The Bureau of Labor Statistics reports a seasonally adjusted 7.443 million open jobs at the end of the month. This was down 418,000 for the month and 20.0 percent from a year earlier. The private sector had 6.626 million unfilled jobs, with professional/business services and health care/social assistance each having more than a million openings. Employers hired 5.558 million people, up 123,000 for the month but off 7.1 percent from a year earlier. 5.196 million people separated from their jobs in September, up a modest 28,000 for the month but down 5.9 percent from a year earlier. 3.071 million people quit their jobs (September 2023: 3.596 million) and layoffs swelled to 1.833 million (September 2023: 1.595 million).
Conference confidence measure surged in October. The Conference Board’s Consumer Confidence Index jumped 9.5 points to a seasonally adjusted 108.7 (1985=100). The index was at 99.1 a year earlier. The current conditions index rose 14.2 points to 138.0, while the expectations measure added 6.3 points to 89.1. 21.4 percent of survey respondents view current business conditions as good, versus 16.4 percent seeing conditions as “bad.” 35.1 percent of consumers believe jobs were “plentiful,” compared to 16.8 percent saying they are “hard to get.” The press release noted that the gain in sentiment was “broad-based across all age groups and most income groups.”
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending October 26, 2024, First-Time Claims, seasonally adjusted): 216,000, -12,000 vs. the previous week, +14,000 vs. the same week a year earlier). 4-week moving average: 236,500 (+12.4% vs. the same week a year earlier).
- Manufacturing PMI (October 2024, Index (>50 = Expanding Manufacturing Sector, seasonally adjusted): 46.5 (September 2024: 46.5; October 2023: 46.9).
- Construction Spending (September 2024, Value of Construction Put in Place, seasonally adjusted annualized rate): $2.149 trillion (+0.1% vs. August 2024; +4.6% vs. September 2023).
- Pending Home Sales (September 2024, Index (2001=100), seasonally adjusted): 75.8 (August 2024: 70.6; September 2023: 73.9).
- FHFA House Price Index (August 2024, Purchase-Only Index, seasonally adjusted): +0.3% vs. July 2024; +4.2% vs. August 2023.
- S&P Case-Shiller Home Price Index (August 2024, National Index, seasonally adjusted): +0.3% vs. July 2024. +4.3% vs. August 2023.
- Agricultural Prices (September 2024, Prices Received by Farmers, not seasonally adjusted): -5.6% vs. August 2024; -0.9% vs. September 2023.
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What We Learned About the U.S. Economy Last Week 