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The 'most remarkable' Oct. jobs stat is not wage growth, JPMorgan strategist says

The October jobs report was "very good" and indicates the economy is running at "full employment," JPMorgan Asset Management Chief Global Strategist David Kelly told CNBC on Friday.

Vincent Reinhart, chief economist at Standish Mellon, agreed in the same "Squawk on the Street" interview. The Federal Reserve views full employment as the level of employment that does not push up on inflation or bring inflation down.

Even though nonfarm job growth of 161,000 last month was slightly worse than expected, wage growth as measured by average hourly earnings posted a 2.8 percent annualized increase. That's the largest rise in seven years. The unemployment rate ticked down slightly to 4.9 percent.

The numbers do seem to add to the case for a December interest rate hike. Central banks last increased the cost of borrowing in December 2015, the first such move in more than nine years.

"There's evidence on labor hoarding on the part of firms. You don't see many quits [or] many layoffs. The fact that they've got to pay workers more to keep them on the job tells you the market is pretty hot," Reinhart said.

But for Kelly, the wage growth number did not tell the biggest story. "To me, the most remarkable statistic ... is the number of people who are short-term unemployed — people unemployed less than five weeks. That is lower than it's been 98 percent of the time in the last 50 years."

In October, the number of people unemployed less than five weeks was nearly 2.4 million on a seasonally adjusted basis, down from 2.57 million in September.

"We are basically out of easily employable workers," Kelly argued.

Reinhart said there's no doubt the labor market has been tightening, but "composition of the job gains isn't very attractive."

"We're getting service employment but not manufacturing employments. We're getting the lower wages rather than the higher paying wage industries hiring," he explained. "That's bad for income distribution. It's bad for income growth generally."

Meanwhile, the labor-force participation rate in October edged lower to 62.8 percent, and remained around the low levels last seen in the late-1970s.

Kelly called the participation rate "the most abused statistic" in all of economics, saying the reason for the low rate is because "baby boomers are retiring by the millions," not that people are giving up and dropping out of the workforce.

Out of what he calls the many "misused economic statistics," Reinhart said he'd put the participation rate lower on his list.

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