HomeContributorsFundamental AnalysisStrong Rebound in US Job Growth

Strong Rebound in US Job Growth

  • Job growth accelerated to 266,000; strongest since January
  • Return of 44,000 striking auto workers boosted manufacturing employment
  • Unemployment rate edged back down to 3.5%

There was a lot to like in today’s employment report: a strong rebound in job growth (even netting out the return of workers on strike), upward revisions to earlier months, a lower unemployment rate, and still-solid (though not accelerating) wage growth. A key question for the US economy this year has been whether a slowdown in industrial production and business investment (related to rising trade tensions and a softer global outlook) would spill over into other sectors and drive a broader slowdown in growth. Once again the jobs numbers suggest limited evidence of that dynamic. Yes, employment growth slowed across many industries this year, but low jobless claims and still-elevated vacancies suggest lack of labour supply is a big part of the story. Overall job gains have remained strong enough to push the unemployment rate to new, multi-decade lows.

Solid growth in the household sector, spurred on by the Fed’s rate cuts, has provided a nice buffer against external headwinds and trade uncertainty. And we’re seeing early evidence that business investment, which was a drag on growth in recent quarters, may be bottoming out in Q4. All of this suggests the Fed is done with its mid-cycle adjustment, barring an unexpected materialization of downside risks. Expect a steady rate decision next Wednesday, and more of the same in 2020.

RBC Financial Group
RBC Financial Grouphttp://www.rbc.com/
The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.

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