Friday, November 03, 2006

October Employment Report

by Bill McBride on 11/03/2006 08:59:00 AM

The BLS reports: U.S. nonfarm payrolls climbed by 92,000 in September, after a revised 148,000 gain in August, and the unemployment rate fell to 4.4% in October from 4.6% in September.

Click on graph for larger image.

Here is the cumulative nonfarm job growth for Bush's 2nd term. The gray area represents the expected job growth (from 6 million to 10 million jobs over the four year term). Job growth is about in the middle of the expected range.

The following two graphs are the areas I've been watching closely: residential construction and retail employment.


Residential construction employment decreased by 31,600 jobs in October and is down 93.2 thousand, or about 2.8%, from the peak in February. This is the beginning of the loss of several hundred thousand residential construction jobs over the next year or so.

Note the scale doesn't start from zero: this is to better show the change in employment.


Retail employment declined 3,500 jobs in October. The YoY change in retail employment is now -0.4%.

The YoY decrease in retail employment is concerning: see Retail Employment

Overall, the upwards revision to the August and September reports more than offset the weak October report, and the unemployment rate decreased to 4.4%.

The expected job losses in residential construction employment has started in earnest. I expect the rate of losses to continue to increase over the coming months.