The labor market in the US showed a tendency to get things on track with the increase that was more than expected. As the effects of the delta variable diminish, progress is made in filling the still millions of job positions. We can say that less seasonal fluctuations, the termination of unemployment benefits to a large extent and the increase in return to work are effective in the strong rebound at this stage. Nonfarm payrolls in October also surpassed the reported increase of 312K in September according to the revised data and was announced as 531K, better than expected 450K. While the labor force participation rate remained unchanged, the unemployment rate fell to 4.6%, better than the 4.7% expected in market surveys. If the headline is the 2-month net revision for employment, it is at the level of 235K, and the strong revision to the previous month will alleviate the weak perception. In the long-term unemployment rate, the downward trend is preserved, moving from 8.5% to 8.3%. The faster hiring pace means more Americans are returning to their workplaces as Covid-19 cases decrease and employers offer higher wages. Some of the employment growth may have received some support after an estimated 7.5 million people lost their federal extended unemployment benefits Sept.
If we look at the sub-items; While an increase of 604K was observed against the expectation of 420K in the private sector, it showed an increasing trend on general employment. Of course, the increase in the private sector, above the general level, indicates that job positions have been reduced in the public sector as well. Workforce growth was widespread, with notable job gains in entertainment and hospitality, professional and business services, manufacturing, shipping and warehousing. In public education, however, employment declined during the month. The unemployment rate and the number of unemployed of 7.4 million fell significantly from their highs at the end of the February-April 2020 recession. However, they remain above their pre-coronavirus (COVID-19) pandemic levels (3.5% and 5.7 million respectively in February 2020). Nonfarm payrolls have increased by 18.2 million since the last low in April 2020, but are 4.2 million lower than their pre-pandemic level in February 2020.
Employment in the entertainment and hospitality industry increased by 164K in October. Professional and business services added 100K jobs in October, including a 41K gain in temporary relief services. Employment in the manufacturing sector increased by 60K in October, led by an increase in motor vehicles and parts (+28K). Employment in transport and warehousing increased by 54K in October, 149K above February 2020 level. Construction employment increased by 44K in October after a 30K increase in September. Healthcare added 37K jobs in October, with most of the gains occurring in home healthcare (+16K) and care facilities (+12K). Retail trade employment increased by 35K in October. Employment increased in food and beverage stores (+16K), general trade stores (+15K), health and personal care stores (+8K), electronics and white goods stores (+6K). Employment in financial activities increased by 21K in October, returning to February 2020 levels. Mining employment continued to rise in October (+5K), but decreased by 87K from its peak in January 2019.
Employment in local government and state education decreased in October (-43K and -22K, respectively). Employment in private education has changed little (+17K). Recent employment changes in public and private education are difficult to interpret as staff fluctuations related to the pandemic have disrupted normal seasonal hiring and firing patterns. Since February 2020, employment has decreased by 370K in local government education, 205K in state government education and 148K in private education.
When we look at the sectoral distribution trends; We can say that the delta effect has got better. In addition, the impact of the global supply chain on manufacturing activity seems minimal at this stage, although it still poses a downside risk. The real thing is pay increases. In October, average hourly earnings for all employees on private nonfarm payrolls rose 11 cents to $30.96, after large increases in the previous 6 months. Average hourly earnings increased by 4.9% over the last 12 months, with a seasonal increase of 0.4%. Marginal change in manager positions is not very decisive at this stage of employment recovery. For this reason, if the weighted numerical increase of the services-related sectors is accompanied by wage increases, the main expenditure effect comes from this. In wage changes, the manager position does not change much in financial status. The main point for the Fed is here, because on the one hand, the increase in inflation reveals the necessity of keeping the benefit to work high; On the other hand, the expectation that inflation will increase even more accelerates the consumption effect as the New Year’s Eve approaches. Important points in terms of feeding inflation. On the one hand, costs bring inflation; On the other hand, expenditures bring inflation and while all this happens, inflation brings inflation along. There is a multi-criteria situation in terms of the Fed’s pace of action, and they will separate the underlying effects of inflation and deal with the event.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
