Temp agency hiring and seasonal employment pushed job growth in October to the highest level this year. In a dramatic reversal from the mediocre employment growth of the last two months, the U.S. jobs market added 271,000 jobs. Unemployment declined to 5 percent.
Surveys of economists in advance of this morning’s report from the Labor Department’s Bureau of Labor Statistics put the average of their forecasts at around 182,000, a prediction that gained support after Wednesday’s ADP employment report which said the nation’s private employers added 182,000 jobs.
The government’s numbers came in 50 percent higher, with nearly all the increase coming from hiring by the private sector, which added 268,000 jobs.
Hiring by temp agencies jumped by 24,500 jobs on a seasonally adjusted basis, the largest increase this year. It follows two months of single digit growth. For the year, agencies have increase their payrolls by 64,400 workers. In 2014, the increase in the first 10 months of the year was 123,000.
Today’s report was especially closely watched. After hiring slowed so much in July and August — 137,000 and 153,000 respectively — the Federal Reserve put off raising interest rates, signaling that it might still consider an increase depending on the employment picture.
With the strong October report, investors worried anew the Fed might now go ahead with an increase at its next meeting. The markets were down this morning.
Economists, however, saw the report as positive.
Commenting to The Washington Post, Cornell economics professor, Steve Kyle said, “It was pretty strong… Nobody should come away from this report frowning and thinking that would have been better.”
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In addition to the surge in hiring, some of it seasonal in advance of holiday shopping, hourly wages jumped 9 cents for private, non farm worker, a 2.5 percent increase for the year and the biggest increase since 2009. Average hourly pay October was $25.20.
At 5 percent, unemployment is now near or at what most economists expect is close to the bottom. According to the data from the Bureau of Labor Statistics, there were 7.9 million people out of work and counted as unemployed. A broader measure of unemployment, the so-called U-6, put the number at 9.8 million.
Seasonal hiring clearly added to the hiring surge last month. Temp agency hiring jumped from 2,600 in September to 24,500 last month. Hiring by retailers added 43,800 jobs; 19,500 from clothing stores alone. Restaurants and bars added 42,000 workers.
Goods-producers, the sector that includes manufacturing, mining, petroleum and construction, grew by 27,000, entirely from a 31,000 jump in construction hiring, lead by increases in non-residential construction. Manufacturing was flat, while mining and logging shed 4,000 jobs. The energy sector accounted for 2,700 of the lost jobs.
Hiring, though, was strong across most of the service sector industries:
- Healthcare grew 44,900 jobs, with 26,900 in ambulatory care services, which includes doctors’ offices and home health. Hospitals added 17,800 jobs.
- Construction added 31,000 jobs, 21,100 in the nonresidential specialty trades.
- Professional and technical services, a category that includes computer design and services, architectural and engineering, accounting and management consulting, added 26,900 jobs.
- The insurance industry added 5,000 jobs as did real estate.
- Auto dealers upped their payrolls by 5,600 workers.