• US adds 638,000 jobs in October
• Unemployment falls for sixth straight month to 6.9% from 7.9%
• Wage growth increased 0.1% mom and 4.5% yoy
• Labor force participation rate increased to 61.7%
• Job growth maintains strong momentum but COVID-19 containment threatens further recovery

US non-farm payrolls (NFP) rose 638,000 in October (consensus: 530k) and the unemployment rate fell sharply again to 6.9%, reflecting a surprising show of strength for the economy even as coronavirus cases rose to record highs. The change in total nonfarm payroll employment for August was revised up by 4k from 1.489m to 1.493m, and the change for September was revised up by 11k from 661k to 672k. With these revisions, employment in August and September combined was 15k higher than previously reported.

Private-sector employment rose by a more robust 906k but a sharp decline in government employment pulled down the overall total. Hiring in October was strongest among white-collar companies in technology and other professional fields. They added 208k jobs. Employment in leisure and hospitality increased by 271k in October, with gains in bars and restaurants created 192k jobs while hotels hired 34k workers. Leisure and hospitality have only brought back just over half of the 8.3m jobs lost, however. Retailers, for their part, increased payrolls by 104k and have recovered almost all the jobs that were wiped out during the first phase of the pandemic. Employment in manufacturing, meanwhile, rose by 38k in October. Manufacturers have recovered just over half of the 1.35m jobs that companies shed in March and April. Construction jobs increased by 84k. Government employment fell by 268k in October. The US Census eliminated 147k temporary jobs as it wound down the 2020 survey. The Census is conducted every 10 years.

The unemployment rate also improved more than anticipated, falling to 6.9% from 7.9% in September. The jobless rate decline was positive as it came with a labor force participation rate that rose 0.3 percentage points to 61.7%. The average hourly earnings ticked up just 0.1% mom in October. Wage growth is at 4.5% yoy.

Source: BIMB Securities Research - 9 Nov 2020