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What October Manufacturing Tells Us about Developed Markets

PART:
1 2 3 4 5 6 7 8 9 10 11 12
Part 9
What October Manufacturing Tells Us about Developed Markets PART 9 OF 12

What the US Non-Farm Payroll Improvements Tell Us

US non-farm payroll in October

The non-farm payroll report for the US in October indicated a strong improvement in the US labor market (SPY) (VFINX) after a decline in September. September’s fall was the first decline in the labor market in seven years. Due to the hurricanes in August, job numbers in food and drink services felt the impact in September.

What the US Non-Farm Payroll Improvements Tell Us

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The non-farm payroll figure improved by 261,000 in October 2017, compared with the fall of 33,000 jobs we saw in September, but the October figure still fell short of the market expectation of a 310,000 gain.

Key highlights of the jobs report

The healthcare (XLV) sector added 22,000 jobs in October. Below are a few more key details from October:

  • Employment in food and drink services added 89,000 jobs.
  • The professional and business services sector added 50,000 jobs.
  • The manufacturing sector added 24,000 jobs.

These improvements in labor market conditions are helpful for market movement. Improvements in labor market conditions and wage growth increase consumer activity, which is a positive factor both for the economy and for the market.

Notably, the S&P 500 Index (IWM) (IVV) is making new highs every day. The new high in the S&P 500 Index has been mainly driven by rising hopes among many for the passage of tax reform, which is expected to boost employment.

In the next part, we’ll analyze the performance of the US ADP employment in October 2017.

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