US job creation probably reaccelerated in October

The BLS is expected to report that US payroll employment growth gathered steam once again in October, after disappointing results in August and September. Nonagricultural concerns hired 220,000 net new workers this month, besting the admittedly tepid 139,000 average gain over the August-September span.

Fundamental and technical factors underpin this call for a significant pickup in job growth in October. The average number of persons filing initial claims for unemployment insurance contracted by 9,000 to an expansion-low 264,000 over the five weeks leading up to the October canvassing period, implying that the pace of layoffs has slowed considerably since September.

Consistent with the notion that the previously unemployed are indeed finding work, the number of persons on regular state benefits contracted by 100,000 to a 15-year low of 2.14 million during the period ended October 17. 

"Unusually warm temperatures during the first half of the month, together with atypically dry conditions across the continental US, are expected to provide a lift to hiring in a variety of industries during the reference period", says Societe Generale. 

Finally, the BLS' estimated seasonal adjustment factors likely will be far less harsh than the mean 749,000-job haircut utilized over the 2010-14 span.