US: Labour market is more resilient than you think – NFB

Krishen Rangasamy, analyst at the National Bank of Canada, the data from the October US official employment report shows the labor market offers no signs of folding and shrugged off talk of recession.

Key Quotes:

“The establishment survey not only showed a consensus-topping 128K increase but also upward revisions to prior months which added an extra 95K to non-farm payrolls. That was made possible by a rampant private services sector whose net hiring dwarfed the expected decline in factory employment due to the strike at General Motors ─ the latter will reverse, hinting that overall employment could remain strong in November.”

“Also encouraging were wage gains which left the year-on-year print unchanged at a healthy 3%, well above inflation.”

“Full-time positions now account for 83% of employment, the highest since March 2008. That will help support consumer spending on durable goods and housing. True, the latter survey also showed a jobless rate creeping up slightly to 3.6%, albeit still near 50-year lows. But that was largely due to the participation rate rising to a six-year high of 63.3%, a positive development.”

“This morning’s data will validate the Fed’s decision of taking a pause in its easing cycle.”

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