The U.S. economy added about 250,000 jobs in October, with strong gains in health care, manufacturing, construction, and transportation and warehousing, the U.S. Bureau of Labor Statistics reports.
The unemployment rate remained unchanged at 3.7% – but that’s the lowest level since 1969.
The good news for mortgage lenders is that wages are starting to increase – up 5 cents in October.
However, wage growth continues to be outpaced by inflation and rising home prices. Plus, housing continues to face the problem of lack of supply.
As of the end of October, the number of people counted as unemployed was little changed at 6.1 million. The number of long-term unemployed (those jobless for 27 weeks or more) was also unchanged at about 1.4 million.
The long term unemployed accounted for 22.5% of the unemployed.
The labor force participation rate increased slightly to 62.9% – about where it has been all year.
Average hourly earnings for all employees on private non-farm payrolls were at about $27.30 -up 83 cents, or 3.1%, from a year ago.
Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $22.89 in October.
Doug Duncan, chief economist at Fannie Mae, says the strong jobs report “confirms that the economy remains solid,” however, he points out that some of the increase in October might be a result of the hurricane-impacted areas recovering.
“Leisure and hospitality, a weather-sensitive industry, added 42,000 jobs in October, its strongest monthly growth since last October’s recovery from Hurricanes Harvey and Irma,” Duncan says.
“Meanwhile, average hourly earnings accelerated over the year,” Duncan notes. “The increase in earnings is a welcome sign for workers and is unlikely to stoke faster inflation given the steady improvement in productivity.
“The updated information released today suggests that the labor market remains strong and inflation remains manageable, supporting our call that the Fed will raise its key policy rate in December,” Duncan adds. “Meanwhile, the housing sector, another weather-sensitive industry, also registered job gains this month, but the stronger growth in average hourly earnings relative to the private sector overall suggests that labor availability remains a challenge.”