The unemployment rate was essentially unchanged at 5%, compared to 5.1% for September. Average hourly wages increased by eight cents for the month. Reuters reports that wages grew at the strongest pace in 2 Â½ years.
The news caused erratic market behavior, as bond and stock market participants focused initially on low job totals and hoped it meant the Federal Reserve might be more likely to halt its campaign of interest-rate rises, but later grew worried that rising wages could fire inflation. By late morning, US Treasury prices reversed course and were showing losses for fear the Fed might instead extend its rate rises, while stock prices turned down on similar concern. However, bond prices later recovered modestly, according to Reuters.
The Department of Labor said household survey resumed in the areas affected by Hurricane Katrina, but several modifications were still used for survey estimates to better-reflect estimates in the disaster area. The responses were only slightly below normal in the areas affected by Hurricane Rita. Likewise, the impact of Hurricane Wilma on responses from Florida households was minimal.
Industry data reported by the DoL’s Bureau of Labor Statistics include:
- Over the month, construction employment increased by 33,000, with much of the gain (20,000) occurring in residential specialty trade contracting. Prior to October, construction employment had been expanding by an average of 21,000 per month in 2005. October’s gain may partly reflect rebuilding and clean-up efforts following Hurricane Katrina. Mining continued to trend upward, adding 5,000 jobs over the month.
- Manufacturing added 12,000 jobs in October. Employment in transportation equipment increased by 22,000, largely due to the return of 18,000 striking workers in the aerospace industry. This gain in transportation equipment employment was partly offset by job losses in computer and peripheral equipment (-2,000), electrical equipment and appliances (-3,000), and miscellaneous manufacturing (-4,000) in October.
- Employment in financial activities continued to grow in October, rising by 22,000. Employment gains in credit intermediation accounted for about half of the over-the-month increase. Over the year, credit intermediation has added 107,000 jobs. Employment in insurance edged up in October.
- Health care employment also continued to grow in October, increasing by 17,000. Ambulatory health care services, which includes doctors’ officesand outpatient clinics, added 11,000 jobs. Hospitals also contributed to the employment gain with an increase of 6,000 jobs.
- Employment in the leisure and hospitality industry edged down in October,after declining by 63,000 in September. Within the industry, food services–which includes restaurants and drinking places–accounted for the weakness over the month. Prior to September, food services had been adding about26,000 jobs per month in 2005.
- Retail trade employment was essentially unchanged in October, following a large decline in September. In October, there were job losses in department stores (-18,000) and automobile dealers (-9,000). Following large declines in August and September, employment in food stores edged up by 9,000 in October. Sporting goods, hobby, book, and music stores also added 9,000 jobs over the month, largely offsetting a decline in September.
- Professional and business services employment was little changed in October. Over the last 12 months, however, the industry has added 442,000 jobs. Over the month, employment in computer systems design and related services increased by 8,000.
“The underlying trend looks to still be in the 200,000 (jobs per month) range,” said economist Joel Naroff of Naroff Economic Advisors in Holland, PA, in the Reuters release. “And if that is correct, conditions are okay, really.”
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