U.S. Payrolls Grew by 128,000 in October

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By Eric Morath and Amara Omeokwe

Despite the GM Strike The jobless rate ticked up to 3.6%

WASHINGTON—U.S. employers hired at a solid clip in October, showing the job market remains strong even in the face of labor strikes and trade disputes.

The economy added 128,000 jobs in October, the Labor Department reported Friday. Job creation in September and August was revised up by a net 95,000. The jobless rate ticked up to 3.6% last month from 3.5% in September. The prior month’s reading was the lowest rate since December 1969.

Meanwhile, wage gains continued to outpace inflation. Average hourly earnings climbed 3% from October 2018.

Economists surveyed by The Wall Street Journal forecast payrolls to grow by 75,000 in October, an unemployment rate of 3.6%, and a 3% increase in wages from a year earlier.

The 40-day GM strike ended last week. The government wouldn’t have counted thousands of GM workers on picket lines last month because they were on strike the week of the employer survey. Friday’s report stated employment in auto manufacturing fell by 42,000, “reflecting strike activity.” When excluding autos, manufacturing employment increased last month.

The unemployment rate, determined by a separate survey of households, was less affected by the strike because GM workers would likely have been counted as employed but not reporting due to a labor dispute. The two surveys use different definitions to count employment.

MORE ON THE ECONOMY

• U.S. Payrolls Grow by 128,000 Despite GM Strike; Jobless Rate 3.6% November 1, 2019
• U.S. Consumers Stay on a Spending Streak October 31, 2019
• U.S. Inflation Remains Soft in SeptemberOctober 31, 2019
• U.S. Housing Market Gaining Modest Strength, Indicators Show October 29, 2019

While job creation has cooled this year, the latest data shows the labor market remains healthy. Employers have added an average 167,000 jobs to payrolls each month this year, a slowdown from the 223,000 jobs added each month, on average, last year. Next month’s hiring will get a boost with auto workers returning to the job.

The economy added net jobs with many domestic-facing sectors continuing to hire, despite broader economic concerns.

The health-care sector added 34,200 jobs in October, business services added 22,000, hospitality, including restaurants, added 61,000. U.S. employers overall have added to payrolls for 109 straight months, by far the longest stretch of consistent job creation on record to 1939.

With the unemployment rate low and the economy in a decadelong expansion, diners are as hungry as ever for tacos, said Michael Mabry, chief development officer as Fuzzy’s Taco Shops, a Fort Worth, Texas, chain of 150 restaurants in 17 states. The company is planning to add between 15 and 20 locations by the end of next year, an expansion that would create several hundred new jobs, Mr. Mabry said.

“The industry itself is stable and our company is having some pretty good months, so it’s stacking up to be a pretty good year,” he said. Mr. Mabry said finding and retaining workers can be challenging. The firm’s restaurants are trying to become more efficient by redesigning kitchens to reduce the number of prep cooks and combining bartender and cashier jobs during slower periods of the day, he added.

Still, slowing global growth, trade tensions and a slowing of the U.S. economy have weighed on job creation this year after strong grains in 2018. The Federal Reserve this week cut its benchmark interest rate for the third time since July in an attempt to stimulate the economy. Central banks elsewhere in the world are taking similar steps.

And some U.S. employers are acting cautiously.

Melissa Ball, owner of Ball Office Products, isn’t cutting staff, but she also isn’t looking to add workers to her 30-person company in Richmond, Va.

“We have a good sense of comfort right now but not a lot of long-term security,” she said. Tariffs led to higher prices for some products, she said. But more generally, Ms. Ball said she is preparing for a slowdown after some strong years. “I’m not going to hire someone that I don’t feel really confident about their employment prospects with us for a long time.”

The unemployment rate last month rose in part because more American joined the labor force, a positive sign

The share of Americans working or searching for work last month rose to 63.3% from 63.2% in September. The rate rose last month to the highest level since August 2013, hinting the strong labor market is drawing some Americans off the sidelines. Still, the rate remains below prerecession levels and is well below record highs above 67% set in the early 2000s.

A broader measure of unemployment and underemployment-which includes those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full-time-rose to 7.0% in October from 6.9% in September.

Despite a very low unemployment rate suggesting workers are in short supply, wage growth has largely plateaued. Average hourly earnings for private sector workers increased 6 cents in $28.18 an hour.

Wages last year accelerated to grow at better than a 3% rate from a year earlier for the first time in a decade. But since peaking at a 3.4% increase in February, pay increases have eased somewhat. That suggests while businesses have job openings, many businesses are reluctant to boost wages enough to poach workers from competitors.

Write to Eric Morath at eric.morath@wsj.com and Amara Omeokwe at amara.omeokwe@wsj.com