A more confident consumer is giving a lift to the improving job market.
The economy added a better-than-expected 171,000 jobs last month, the Labor Department said Friday. A healthy portion of the additions came from sectors such as retail and construction that were lagging but now are benefiting from a more bullish consumer.
Retail employment rose by 36,000 in October, the most since January 2011, and it's up by 82,000 since August, the biggest three-month increase in several years.
"Households are starting to contribute more to the economic recovery," says Mark Zandi, chief economist at Moody's Analytics. The recovering housing market, in particular, is bolstering employment in several sectors, he says.
Diane Swonk, chief economist at Mesirow Financial, says rising home prices are making consumers feel wealthier, and mortgage refinancings are putting more cash in their pockets.
Reports last week showed chain-store sales rose briskly last month and consumer confidence reached the highest level since February 2008.
Vehicle sales, though down slightly from the 41/2-year highs hit in September, are still 7.2% above a year ago as consumers continue to replace aging vehicles.
And home sales and housing starts are picking up noticeably.
The accelerating activity is filtering into payrolls, adding diversity to a labor market that largely had been driven by job gains in professional and business services, health and education, and business travel-related services.
"We have seen a better mix of job growth," says Moody's economist Marisa DiNatale.
Within the retail industry, auto and auto-parts dealers added 7,300 jobs last month, a two-year high. Although department stores trimmed jobs, discount stores such as Wal-Mart added employees as middle-income consumers hunt for bargains.
Perhaps most encouraging: Furniture and home furnishing stores, which were battered in the recession, have added about 7,000 jobs the past three months as rising home sales spark more furniture purchases. After cutting its staff by 17% in the recession to 2,500, Western furniture chain R.C. Willey added employees this year -- about 55 -- for the first time in several years, says President Jeff Child.
In Las Vegas, "People are now buying (homes) to live in" rather than as investments, prompting more flooring and appliance sales, Child says. Revenue this year is up nearly 10%, he says.
Yet long-term shifts in retailing to online sales and the spread of technology, such as self-service checkout, will likely limit the pace of employment advances, says Jack Kleinhenz, chief economist at the National Retail Federation.
Other industries benefiting from awakening consumers:
Construction companies added 17,000 employees last month, the most since January.
Specialty trade contractors, such as plumbers and electricians, accounted for much of the increase as home building and remodeling surged, says Ken Simonson, chief economist at Associated General Contractors of America.
Manufacturers of wood products, including goods for the housing industry, have added 4,200 jobs since July after cutting payrolls steadily in recent years.
A financial services sector that includes mortgage brokers has added about 10,000 jobs since June on a non-seasonally adjusted basis. That industry also had been shedding workers.
Food services and drinking places added 23,000 jobs in October and have added 320,000 over the past year.
Most Popular Stories
- Tablets, Cars Drive AT&T Gains
- 2015 Mazda MX-5 Miata Is Fast and Eager
- Small Businesses Add 3 More Worries to Their List
- DOMA Tech Adding Jobs to Process VA Claims
- Apple Warns of China iCloud Attack
- Tech Firms Flock to LA's 'Silicon Beach'
- Job Hunting Is Hard Work
- Stocks Subdued After Gains Earlier in Week
- Ford, GM Expect to Report Strong Profits
- Consumer Prices Edge Up, Surprising Economists