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By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.

October Shows Strong Job Growth...Hurricane Effects?

Payroll jobs bounced nicely in October, following muted gains in September. Private-sector payroll jobs rose by 246,000, following a September gain of 121,000. There was a +13,000 revision to the level of private payroll jobs in both August and September.

At Western Asset, we track a modified measure of private-sector jobs that excludes volatile construction and retailing sectors. Our measure showed a gain of 214,000 in October, off a September gain of 121,000, including +26,000 of revisions to the September level. These gains compare to a 2013-16 trend average of +164,000.

So, for our preferred measure, average job gains over the last two months—and indeed over the last six months— have been above previous years’ trends: 186,000 per month recently, compared to 164,000 per month gain previously.

While we exclude construction and retailing because of their typical volatility, construction job growth this year has been quite stable around 24,000 per month. Retailing jobs are about flat for the year and down slightly since April.

There was some thought that hurricanes would cause September job growth to be understated and October to be overstated. This does not appear to have happened. As seen in the chart, the swings in the last two months are much more muted than what we saw during the 2017 hurricane season. Similarly, a year ago, average wages rose +0.5% in September then declined -0.2% in October, as lower wage workers stayed home during the hurricanes in September and came back to work in October. This year, average wages rose by 0.3% in September and by 0.2% in October, so very little hurricane "chop" in 2018.

So, it appears that the swing in job growth from September to October reflects normal monthly fluctuation rather than hurricane effects. Meanwhile, again, averaging out the monthly ups and downs, the pace of job growth has picked up a bit in recent months. We’ll discuss the import of this in our By the Numbers installment for next week.

Monthly Job Growth
Monthly Job Growth
Source: Bureau of Labor Statistics. As of 31 Oct 18

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 43 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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