skip navigation
Blog

Stay up to date on timely topics and market events. Subscribe to our Blog now.

ECONOMY
November 05, 2021

Jobs, Jobs Everywhere in October Payroll Report

By Michael J. Bazdarich, PhD
Download the Article

Stay up to date on timely topics and market events. Subscribe to our Blog now.

Data released today by the Bureau of Labor Statistics (BLS) show private-sector jobs rising by 604,000 in October, with the September jobs estimate revised upward by 220,000, and with the upward revision to job gains split about equally between August and September. A cigarette manufacturer used to float the canard “Not a cough in a carload.” I was reminded of that slogan when I saw today’s data, with substantial job gains occurring in virtually every industry group.

Exhibit 1: Private-Sector Job Growth Decomposed
Private-Sector Job Growth Decomposed
Source: Bureau of Labor Statistics. As of 31 Oct 21. Select the image to expand the view.

The one sector not showing big October job gains was public schools, where Covid restrictions in the face of “normal” school patterns continue to skew the data. That is, prior to seasonal adjustment, public school jobs rose by 330,000, but because that rise was not as large as usual, with many schools still closed, it was seasonally adjusted into a decline of 65,000.

Speaking of Covid restrictions, mask mandates and seating restrictions seem to be still in place for sectors such as restaurants, passenger travel and recreation facilities. Yet, each of these sectors saw nice October gains and upward revisions—109,000 and 27,000 for restaurants, 28,000 and 1,000 for travel, and 21,000 and 11,000 for recreation.

Meanwhile, manufacturing saw gains of 60,000, with 23,000 of revisions. Even construction, which had been hit by declining activity in recent months, saw October job gains of 44,000, with 7,000 of revisions.

The accompanying chart provides some perspective. Total job growth crested around 800,000 per month in early-summer, when reopening of the economy was in full flower. The restaurant industry appeared to have fully recovered by then, and both job and sales growth there then flattened over August/September. However, jobs there, at least, bounced nicely in October. The same was true of other sectors that have been hit hard by Covid restrictions. In remaining sectors, it looked like there was some slowing in mid- to late-summer, but with today’s October gains and August/September revisions, job growth there looks like it may be coming back on track.

A logical question is, “where are the workers coming from?” The reports of worker scarcity are continuous, and BLS’s separate survey shows the workforce rising by only 104,000 in October opposite these job gains. Meanwhile, even with the October gains, payroll jobs are likely still a year or more away from re-attaining pre-Covid growth trends.

We’ll leave these issues for another time. For now, suffice it to say that today’s payroll report marked a welcome break from the apparently softer trends of preceding months.

© Western Asset Management Company, LLC 2024. The information contained in these materials ("the materials") is intended for the exclusive use of the designated recipient ("the recipient"). This information is proprietary and confidential and may contain commercially sensitive information, and may not be copied, reproduced or republished, in whole or in part, without the prior written consent of Western Asset Management Company ("Western Asset").
Past performance does not predict future returns. These materials should not be deemed to be a prediction or projection of future performance. These materials are intended for investment professionals including professional clients, eligible counterparties, and qualified investors only.
These materials have been produced for illustrative and informational purposes only. These materials contain Western Asset's opinions and beliefs as of the date designated on the materials; these views are subject to change and may not reflect real-time market developments and investment views.
Third party data may be used throughout the materials, and this data is believed to be accurate to the best of Western Asset's knowledge at the time of publication, but cannot be guaranteed. These materials may also contain strategy or product awards or rankings from independent third parties or industry publications which are based on unbiased quantitative and/or qualitative information determined independently by each third party or publication. In some cases, Western Asset may subscribe to these third party's standard industry services or publications. These standard subscriptions and services are available to all asset managers and do not influence rankings or awards in any way.
Investment strategies or products discussed herein may involve a high degree of risk, including the loss of some or all capital. Investments in any products or strategies described in these materials may be volatile, and investors should have the financial ability and willingness to accept such risks.
Unless otherwise noted, investment performance contained in these materials is reflective of a strategy composite. All other strategy data and information included in these materials reflects a representative portfolio which is an account in the composite that Western Asset believes most closely reflects the current portfolio management style of the strategy. Performance is not a consideration in the selection of the representative portfolio. The characteristics of the representative portfolio shown may differ from other accounts in the composite. Information regarding the representative portfolio and the other accounts in the composite are available upon request. Statements in these materials should not be considered investment advice. References, either general or specific, to securities and/or issuers in the materials are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendation to purchase or sell such securities. Employees and/or clients of Western Asset may have a position in the securities or issuers mentioned.
These materials are not intended to provide, and should not be relied on for, accounting, legal, tax, investment or other advice. The recipient should consult its own counsel, accountant, investment, tax, and any other advisers for this advice, including economic risks and merits, related to making an investment with Western Asset. The recipient is responsible for observing the applicable laws and regulations of their country of residence.
Founded in 1971, Western Asset Management Company is a global fixed-income investment manager with offices in Pasadena, New York, London, Singapore, Tokyo, Melbourne, São Paulo, Hong Kong, and Zürich. Western Asset is a wholly owned subsidiary of Franklin Resources, Inc. but operates autonomously. Western Asset is comprised of six legal entities across the globe, each with distinct regional registrations: Western Asset Management Company, LLC, a registered Investment Adviser with the Securities and Exchange Commission; Western Asset Management Company Distribuidora de Títulos e Valores Mobiliários Limitada is authorized and regulated by Comissão de Valores Mobiliários and Brazilian Central Bank; Western Asset Management Company Pty Ltd ABN 41 117 767 923 is the holder of the Australian Financial Services License 303160; Western Asset Management Company Pte. Ltd. Co. Reg. No. 200007692R is a holder of a Capital Markets Services License for fund management and regulated by the Monetary Authority of Singapore; Western Asset Management Company Ltd, a registered Financial Instruments Business Operator and regulated by the Financial Services Agency of Japan; and Western Asset Management Company Limited is authorised and regulated by the Financial Conduct Authority ("FCA") (FRN 145930). This communication is intended for distribution to Professional Clients only if deemed to be a financial promotion in the UK as defined by the FCA. This communication may also be intended for certain EEA countries where Western Asset has been granted permission to do so. For the current list of the approved EEA countries please contact Western Asset at +44 (0)20 7422 3000.