US adds surprisingly strong 128,000 jobs in October amid GM strike

The US labor market took a hit in October from an extended strike at General Motors but the economy kept adding jobs at a solid pace, the government reported Friday. The steady hiring showed demand for workers remained resilient despite President Donald Trump’s protracted trade war with China, which has chilled investment and slowed the economy.

Employers added 128,000 net new jobs, the Labor Department reported in the closely watched monthly employment report, defying many economists who expected a sharper slowdown. Gains in the prior months were revised upward sharply and wages continued to climb, making the jobs picture even rosier. Meanwhile, the jobless rate rose a notch to a still-low 3.6 percent, as expected. The 3.5 percent unemployment rate in September was the lowest since 1969.

While the GM strike weighed on jobs, the increase in the unemployment rate reflected growth in the labor force as 325,000 people came off the sidelines to look for work. Nearly 50,000 GM workers were called back to work this week following a 40-day strike, but not before the stoppage put a deep dent in October’s auto industry employment levels.

The ranks of auto workers shrank by more than 41,000, according to the report -- the biggest drop in that sector since October 2009, when the American auto giant was on the brink of collapse. Without the impact of the GM strike, employment in the US manufacturing sector would have risen in October and overall payrolls would have risen by around 170,000 net new positions, matching the average of the prior six months.

The news sent Wall Street higher while Trump hailed the news on Twitter, calling it a “blowout” number. “This is far greater than expectations. USA ROCKS!” he wrote, claiming that, adjusted for the prior months’ revisions and the GM strike, October’s report showed a total of 303,000 new jobs.

In fact, even with August and September revised upward by 95,000 and the auto-sector’s losses discounted, the net increase is 264,000. Hiring was also strong in other sectors, averting the dire outcomes some economists had predicted, as bars, restaurants and financial services companies continued to snap up new workers.