The economy created 214,000 jobs on October, marking the ninth consecutive month of job gains over 200,000 (the last time payrolls increased by as much for as many months ended in March 1995). The unemployment rate fell to 5.8%, the lowest since 2008, even as more people entered the workforce (though the participation rate is still hovering near the lowest in almost four decades).
One month after falling to a 14-year low, job cut announcements jumped 68% in October to 51,183 from September’s 30,000, according to the Challenger job cuts report. October’s total marked the second highest of the year, and the fourth time in the past 22 months that layoff announcements have exceeded 50,000. According to the report: “While it is too early to say for certain, the October figure may mark the kick-off to a fourth-quarter surge in job cuts. It is not unusual to see the pace of downsizing accelerate in the final months of the year, as employers take measures to meet year-end earnings and profit goals”.
Also on the downside, factory orders fell .6% in September, marking the second straight monthly decline. New orders for aircraft, machinery, computers and electronics declined. Showing underlying strength, unfilled orders rose .3%.
The trade deficit widened in September as exports fell to a five-month low. The trade gap increased 7.6% to $43.03 billion, while exports fell 1.5% to $195.95 billion – the lowest since April. Outside of slowing global demand, a strong dollar (up about 4% this year against its main trading partners) could hamper export growth. The trade deficit with China widened to a record $35.6 billion as imports from China reached an all-time high.
Source: Census Bureau
On a positive note, productivity increased 2% in the third quarter, marking the fourth increase in the past five quarters of at least 2%. Output of goods and services rose 4.4% while hours worked rose 2.3%.