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Logan Mohtashami talks jobs report, mortgage forbearance

Lead Analyst Logan Mohtashami discusses his recent article on the latest jobs report and the most likely impact on the housing market and mortgage forbearance.

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Politics & Money

U.S. economy adds 128,000 jobs in October

The nation's unemployment rate rises to 3.6%

The U.S. economy added 128,000 jobs in October, after September’s upwardly revised 180,000 jobs, according to the Bureau of Labor Statistics

The unemployment rate came in at 3.6%, rising from September’s 50-year low of 3.5%, and the number of unemployed persons inched backward to 5.9 million in October, according to the report.

Comparing demographic segments, the jobless rates showed little or no change over the month, coming in for men at 3.2%, whites at 3.2%, Hispanics at 4.1%, women at 3.2%, teenagers at 12.3%, Asians at 2.9% and blacks at 5.4%.

The average hourly earnings for all employees on private non-farm payrolls rose 6 cents to $28.18 in October. Over the year, average hourly earnings have risen by 3%.

The change in total non-farm payroll employment in August was revised upward to 219,000 jobs from 168,000. With the revisions to the prior two months, employment gains in August and September combined were 95,000 more than previously reported.

The majority of job gains in October can be attributed to increases in jobs in food services and drinking places, social assistance and financial activities. However, employment declined in other major industries, including manufacturing, and motor vehicles and parts, which decreased due to strike activity.

Notably, federal government employment was down, reflecting a drop in the number of temporary jobs for the 2020 Census.

The average workweek for all employees on private non-farm payrolls remained unchanged at 34.4 hours in October.

Here are some of the areas that showed notable changes in October:

  • Employment in food services and drinking places increased by 48,000 jobs
  • Employment in social assistance increased by 20,000 jobs
  • Employment in manufacturing decreased by 36,000 jobs
  • Employment in motor vehicles and parts decreased by 42,000 jobs

Odeta Kushi, First American’s deputy chief economist, said October’s growth in consumer spending is an indication that America’s economy still has vigor.

 “U.S. added a still-impressive 128,000 jobs in October, exceeding consensus expectations by more than 30,000 jobs, while unemployment ticked slightly higher to 3.6%. Wage growth continued at a still-healthy 3% yearly growth,” said Kushi. “Much of U.S. economic growth is driven by consumer spending, and people are expected to keep spending given that jobs are plentiful, and wages are rising.”

“The recent third-quarter GDP numbers underscored the importance of the consumer in this expansion,” said Kushi. “The GDP increased at an annual rate of 1.9% in the third quarter of 2019. The majority of this growth was driven by a 2.9% increase in consumer spending.”

Since consumer spending accounts for about 70% of economic activity, the continued growth in wages is a good sign for the economy, said Kushi.

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