Jobs Report: Monthly Employment Growth Statistics

Where Were the 261,000 Jobs Added in October?

Afro-American woman in hotel
Hotels and restaurants contribute a lot to job growth in America. Photo: Izusek/Getty Images

The U.S. economy gained 261,000 jobs in October 2017. The economy needs 150,000 new jobs each month to keep expanding. The uptick was due to recovery efforts from Hurricanes Irma and Harvey. It's another reason the Federal Reserve will raise interest rates at its December 2017 FOMC meeting

Industries That Gained Jobs

Leisure and hospitality gained 106,000 jobs. That's after losing 102,000 jobs in September.

  They were hit hard by the hurricanes. Most of their workers are hourly employees. If they can't go to work, they don't get paid. The Bureau of Labor Statistics counts that as a job loss. All those who returned to work in October showed up as a gain in the jobs report. This sector usually adds 20,000 to 30,000 positions a month.

Health care added 33,500 jobs. That's its normal performance. Health care had been the strongest performer even during the recession. It seems uncertainty over Trump's health care plan has not dampened employers' confidence.

U.S. manufacturing gained 24,000 jobs because the strong dollar is subsiding. A weaker dollar helps exports. Durable goods gained 19,000 jobs, partly because of a 3,400 job gain in auto manufacturing

Pay close attention to how many manufacturing jobs are added or lost each month. This is a significant leading economic indicator. Factories are more likely to add workers as soon as they have the orders in hand.

That occurs months or even years before the order ships. That makes manufacturing a better indicator than service employment. Those job levels stay more consistent through thick and thin.

Temporary help services gained 18,500 jobs. Companies often add temp jobs when business is picking up, but they aren't confident enough to add full-time positions.

Construction added 11,000 jobs. It builds on the 24,000 jobs added in August. That's a positive sign for the housing market and another reason the real estate market is not going to crash any time soon.

The government gained 9,000 positions. That's despite President Trump's promises to streamline the federal government.

Financial activities added 5,000 jobs. Banks will add positions as long as the Fed continues to increase interest rates. Higher rates brings greater profitability to lenders because they can charge more for loans.

The mining industry lost 2,000 jobs despite higher oil prices. Excess supply from U.S. shale oil producers is getting absorbed. OPEC agreed to limit its output, but not all countries are complying. Future oil prices are expected to remain stable.

Industries That Lost Jobs

Information services lost 1,000 jobs. The BLS didn't estimate how much of this was due to the hurricanes. This sector, especially Silicon Valley, is critical to American global competitiveness.   

The retail industry lost 8,300 jobs. Store managers have been slashing jobs since March 2017. That was a pull-back after adding them for upticks in consumer spending during the holidays. This includes record-high Black Friday sales.

Despite the poor retail jobs report, wholesale added 5,700 jobs.

Utilities neither gained nor lost jobs. That's after gaining 400 jobs in September and losing 200 jobs in August. 

What Is the U.S. Jobs Report?

The monthly Jobs Report is also called the "Employment Situation Summary" and the "Non-Farm Payroll Report." It's a critical economic indicator because it's the first report of the month. It's also the most comprehensive and credible.

The Bureau of Labor Statistics surveys 160,000 non-farm businesses and agencies on the number of jobs, the wages paid and the hours worked. The jobs report will tell you which industries are adding jobs, whether American workers are working longer hours and how fast salaries are increasing. 

The jobs report also provides the unemployment rate. To get the number of unemployed individuals, the BLS must undertake a separate survey of households instead of businesses.

This household report also includes workers' age, sex and race/ethnicity. The household survey has a more expansive scope than the establishment survey. That's because it includes the self-employed, unpaid family workers, agricultural workers and private household workers, who are excluded by the establishment survey. 

The household survey is not as accurate as the business establishment, though. It has a smaller sample size. That's why employment numbers are taken from the establishment survey. That's why the current unemployment statistics show a different trend than the jobs report.

There are two other jobs reports. The monthly ADP National Employment Report® is released on the first Wednesday of each month. It's produced by the ADP Research Institute, SM and Moody’s Analytics. It uses business payroll data to report on the number of jobs added in the private sector. It excludes farming (as does the BLS report) and, more important, government jobs (included in the BLS report). For that reason, it's considered incomplete.

The ADP Report is important though, because it's released the Wednesday before the BLS report. It gives some analysts an earlier view of what might happen in the Friday report. ADP is quick to say it's not intended to be predictive. Like the BLS report, it's revised as more data comes in later in the month. These revised numbers are 96 percent correlated with the revised BLS jobs report. 

The Department of Labor also releases a weekly jobless claims report. This measures the claims for initial unemployment benefits reported by each state every week. It also reports how many of the unemployed are still receiving benefits. This report gives an indication of trends, whether there are more or less unemployed than the week before. The main value of this report is that it is weekly and so it gives some idea of trends in between the monthly jobs reports. It should be noted though that it isn’t accurate when predicting the monthly report. Furthermore, it is volatile, which can be misleading.