Office-Using Payrolls Advance, Though at a Slower Pace

Economic Pulse
November 7, 2014
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Today’s payroll report for October showed continued job market strength. The unemployment rate edged down to 5.8 percent and nonfarm payroll employment increased by 214,000, even as almost half of the job gains came from just three areas: food service/drinking places, retail trade and health care. Nonetheless, the payroll figures continue to reflect steady labor market growth: payrolls have shown monthly gains (after revisions) for 49 consecutive months.

Following an outsized gain of 80,000 office-using jobs in September (Table 1 and Chart 1) it is not surprising that the change in office employment rose by less than average, advancing by just 36,000. On the month, information and financial activity employment contracted by a combined -1,000 jobs (versus last month’s gain of 25,000) while professional and business service jobs rose by 37,000, led by temporary help workers (+15,100), computer systems design workers (+6,800) and management and technical consulting workers (+4,000).

Table 1. Monthly Change in Office-Using Payrolls by Category (000s, SA)
Monthly Change in Office-Using Payrolls by Category October 2014

One area of the labor recovery that continues to fuel debate surrounds the extent to which job gains are beginning to push wages higher. The majority of sectors that have experienced above-average gains in job growth, however, have shown below-average gains in wage growth (Chart 2), suggesting that for now, wage inflation does not appear to be a concern.

Chart 1. Office-Using Employment and Total Payrolls,
October 2007 – October 2014 (Seasonally-Adjusted, 000s)

Office-Using Employment and Total Payrolls, October 2007 – October 2014

Chart 2. Earnings Growth vs. Job Growth by Sector,
Year-over-Year Percentage Changes
Earnings Growth vs. Job Growth by Sector, Year-over-Year Percentage Changes