Nonfarm payroll employment increased by 250,000 in October, greatly surpassing the predicted increase. The US Bureau of Labor Statistics says the unemployment rate is unchanged at 3.7%.
Nonfarm Payrolls (NFP) is reported as part of the Employment Situation report which also includes the Labor Force Participation Rate, the Unemployment Rate, Average Hourly Earnings and Average Workweek Hours. NFP measures the number of paid employees, and the insight the report can give into the health of the economy and labor market can impact price action in the stock and gold markets, with gold sometimes taking a backseat to those favoring a US dollar strengthened by a flourishing labor market.
Key Takeaways
The number of unemployed people sits at 6.1 million with the unemployment rate at the lowest since 1969.
- The labor force participation rate rose from 69% to 69.2% in October with little yearly change.
- The average workweek for employees on private, nonfarm payroll jobs increased by 0.1 hours to a total average of 34.5 hours.
- Average hourly earnings for nonfarm workers rose in October by 5 cents to $27.30
- The biggest jobs gains were seen in healthcare, manufacturing, warehousing, transportation, and construction.
With former predictions estimating an increase of 190,000, the 250,000 rise is far greater than expected.
Expert Outlook
"The industry is being a little cautious ahead of the jobs data today ... It's certainly a time for them to take a bit of stock after the volatility in the equities markets," said ANZ analyst Daniel Hynes.
"The job market is doing remarkably well, particularly this late in the expansion," said Jim Baird, partner and chief investment officer for Plante Moran Financial Advisors. "This report adds yet another data point to a narrative that has been positive for the labor market this year. Little seems to stand in the way of the economy finishing 2018 out on solid footing."
Market Response
Gold is down 0.19% and trading at $1,233.75/oz after hitting weekly high of $1,237.39 yesterday, the highest since October 26. December Futures are lagging below the price of spot gold at $1,233.40.
A stronger jobs market can boost dollar spending and make gold less of an appealing choice for investors, which may be being reflected in today’s price action. With the tightening labor market, the Federal Reserve is still expected to go ahead with another rate hike in December.
