Analysis: Autoworkers Are A Missing Piece In The October Jobs Report. Here's Why That Matters.

The October nonfarm payrolls report released Friday shows an increase of 150,000 jobs and an unemployment rate of 3.9%. Yet the piece of the report that steals the spotlight is the the 33,000-job decline in the motor vehicles and parts manufacturing space, courtesy the UAW strike.

The 33K-Job Gap: While market watchers are discuss the job report numbers missing expectations pegged at 180,000, the report may not have been a miss if viewed an adjusted basis, accounting for the number of jobs that were purely lost on account of the UAW strike, a one-off factor impacting the October report.

If the 33,000 jobs in the motor vehicle and parts manufacturing sector are added back in, October nonfarm payrolls total 183,000, exceeding expectations.

Of course, the figure remains almost half of September levels, but that’s attributable to a number of factors.

The Economic Backdrop: The labor market is gradually cooling as a result of multiple strikes, including ones by UAW members, which did put pressure on manufacturing payrolls. Yet job gains were seen in construction, social assistance, leisure and hospitality, government, ambulatory health care services and hospitals, leisure and business services and construction.

The largest job gains were recorded from the health care sector (58,000) and health care service (32,000). Health care sector-tracking exchange-traded funds such as the SPDR Select Sector Fund – Health Care XLV and the Vanguard Health Care ETF VHT were seen gaining 1.04% and 1.26%, respectively, at the time of writing Friday.

Manufacturing employment fell by 35,000, including the 33,000 decline in motor vehicles and parts.

Read Next: GM, UAW Reach Tentative Agreement, Potentially Putting An End To Costly 6-Week Strike

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