Implications: Remind us again why the Fed's been cutting rates, because the labor market shows they haven't been needed. In spite of a UAW strike that directly subtracted 46,000 from the number of people working for the month, nonfarm payrolls increased 128,000 in October, beating the consensus expected 85,000. In addition, payrolls were revised up substantially for both August and September, adding an extra 95,000 jobs. Remember two months ago when August payrolls were originally reported up 130,000? This was considered tepid and some analysts feared a major slowdown. But that report was revised up to 168,000 a month ago and was revised up to 219,000 today. Keep that in mind the next time we get a soft number. Civilian employment, an alternative measure of jobs that includes small-business start-ups, grew 241,000 in October. In the past year, nonfarm payrolls are up 174,000 per month while civilian employment is up 161,000 per month. The underlying pace of job creation is likely somewhere in between. Some may be concerned that the unemployment rate ticked up to 3.6% in October from 3.5% in September, but, unrounded, the increase was very slight, to 3.56% from 3.52%. Also, the labor force participation rate rose to 63.3% in October, the highest since 2013, showing cyclical strength in the labor market is outweighing the long-term trend of retiring Boomers. Participation among "prime-age" workers (25-54) hit the highest level in more than a decade. We like to use the employment report to measure workers' purchasing power and that looks healthy, too. Average hourly earnings rose 0.2% in October and are up 3.0% from a year ago. Meanwhile, the number of hours worked rose 0.1% and are up 1.2% from a year ago. Combined, total earnings are 4.2% ahead of a year ago, which is more than enough to keep powering consumer spending higher. It's early, and there's plenty of data to come, but with the UAW strike behind us, it's entirely possible that payrolls increase more than 200,000 in November. It's looking more and more likely the Fed is finally done.
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