Research

Clouds On the Horizon? What to Watch in Friday’s Jobs Report

Andrew Chamberlain

Andrew Chamberlain

Andrew Chamberlain, Author at Glassdoor US | Nov 1, 2016

The latest jobs report from the federal government arrives this Friday—the final labor market update before voters head to the polls on November 8th. Here’s what we’ll be watching for:
  • 128,000 new jobs added to nonfarm payrolls in October.
  • Unemployment rate steady 5.0 percent.
  • Average hourly wages up 2.6 percent from one year ago.
  • Labor force participation rate down slightly to 62.8 percent.
Gloomy Sentiment A recent poll from Marketplace-Edison Research shows Americans are feeling more anxious about the economy than a year ago. However, while this controversial election year has many Americans feeling uncertain, the economic data tell a different story. By most measures, today’s labor market remains strong and steady, with healthy job gains, low unemployment, and near-record numbers of unfilled jobs. We expect to see many of these trends continue in the October jobs report and beyond. The consensus view for non-farm payrolls is roughly 165,000 new jobs added in October. However, we believe the impact of Hurricane Matthew may dip initial jobs figures slightly below this level. Most economists agree Hurricane Matthew dealt a small blow to the U.S. economy, but past research shows storms do affect BLS surveys and have depressed job growth in affected areas by between 1 and 5 percent—something we may see this month. Taken together, we expect modest job gains of 128,000 in October. Watching for Wage Gains There has been growing evidence of wage gains in recent months, including the fastest growth in median household income in decades last year. With the unemployment rate near 3 percent in many cities and near-record numbers of unfilled jobs, it’s no surprise that more workers are in a strong bargaining position today. This month we released Glassdoor’s first Local Pay Reports, which transform Glassdoor’s crowdsourced salary data into a monthly overview of pay trends at the metro level. In that report, we’re seeing overall median U.S. pay growth of 2.8 percent from a year ago. However, wages are growing much faster in big cities like San Francisco and New York City, and in certain key occupations in health care, professional services, tech and several in-demand blue-collar jobs. Read more in our full analysis. In Friday’s jobs report, we expect to see year-over-year growth in average hourly earnings of about 2.6 percent, along with a steady unemployment rate of 5.0 percent. Finally, we expect to see a slight dip in the fraction of Americans in the workforce—the so-called “labor force participation rate”—to 62.8 percent in October. Although that rate has been rising recently, powerful demographic trends have been pulling it down for a decade, and most economists expect that rate to continue falling due to Baby Boomers retiring and Americans spending more time in higher education. As Americans head to the ballot box on November 8th, polls show that many are feeling more pessimistic about the economy. The good news is that the actual numbers on the labor market paint a much more optimistic picture—a trend that all indications suggest will continue in coming months. To speak with Dr. Andrew Chamberlain about this month’s jobs report or labor market trends, contact pr [at] glassdoor [dot] com. For the latest economics and labor market updates, subscribe to email alerts here and follow @adchamberlain.
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Andrew Chamberlain

Andrew Chamberlain

Tags:Labor MarketUnemployment

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