Miss on jobs again: 161,000 added in October

The final big economic indicator before Election Day offered little more than a repetition of the stagnation in job growth that has been the hallmark of the post-Great Recession period. The Bureau of Labor Statistics reports that the US economy added 161,000 jobs in October, a minor miss on expectations of 173,000. Not even the upward revision of the past two months could boost the three-month average over 176,000, and the year-long average in 2016 is almost 50,000 jobs a month lower than 2015:

Advertisement

Total nonfarm payroll employment rose by 161,000 in October, and the unemployment rate was little changed at 4.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in health care, professional and business services, and financial activities.

The unemployment rate, at 4.9 percent, and the number of unemployed persons, at 7.8 million, changed little in October. Both measures have shown little movement, on net, since August 2015. …

Total nonfarm payroll employment rose by 161,000 in October. Thus far in 2016, employment growth has averaged 181,000 per month, compared with an average monthly increase of 229,000 in 2015. In October, employment continued to trend up in health care, professional and business services, and financial activities.

At the current rate of population growth and employment participation rate in the US, we need to add anywhere from 125K-135K jobs per month just to keep up. The civilian non-institutional population rose by 230,000 in October, and applying the employment-population ratio of 59.7%, we would need slightly more than 137,100 jobs added just to tread water. Adding 161,000 barely puts us ahead of that pace, and certainly isn’t providing significant opportunities for the chronically sidelined to jump back into the workforce. In fact, more people left the workforce in October (195,000) than found a job. The civilian workforce participation rate declined a tenth of a point to 62.8%, near a 40-year low.

Advertisement

There were a few bright spots, though. The U-6 measure of unemployment, which gives a much more comprehensive look than the U-3 measure tracked by the media, dropped two-tenths of a point to 9.5%. That is its lowest level since April 2008, just before the financial-sector collapse. Job leavers rose slightly, indicating some comfort with shifting employment, and job losers fell by 218,000. Short-term unemployed fell by 177,000, with only a 62,000 increase in the next category. And wage growth accelerated significantly, hitting its fastest pace (2.8% year-on-year) since the recovery began.

The AP’s Christopher Rugabear calls this “decent,” but notes it’s still the slowest-growth recovery in the post-WWII period. It’s not going to get much better, either, at least not in the short run:

U.S. employers added a decent 161,000 jobs in October, and the unemployment rate dipped to 4.9 percent from 5 percent. It was the final major report on a lukewarm but durable economy before Americans choose a new president next week. …

Still, the economy is growing at the slowest pace of any in a recovery since World War II. Growth picked up to a 2.9 percent annual rate in the July-September quarter, the government has estimated, much faster than the 1.1 percent pace for the first half of the year. But most analysts foresee only modest expansion in the October-December quarter, leaving growth at an anemic rate of about 1.8 percent for all of 2016.

Advertisement

The Wall Street Journal offered a more sunny analysis, even while noting that the topline figure was a miss:

Hiring by U.S. employers remained steady in October as the unemployment rate edged down and wage growth accelerated to its strongest pace since the recession, signaling solid momentum in the labor market just days before American voters elect a new president. …

Economists surveyed by The Wall Street Journal had expected 173,000 new jobs and a jobless rate of 4.9% in October. …

Job gains were broad across most sectors of the economy in October, though employment fell in some industries including manufacturing, retail trade and mining and logging.

Wages continued to rise as the labor market tightened and employers competed to hire and retain workers. Average hourly earnings for private-sector workers rose 10 cents from September, or 0.4%, to $25.92 in October. Economists had expected a 0.3% increase on the month.

Will this have any impact on the election? The September jobs report is usually the one that sets the tone, and these numbers aren’t much different than those in the previous iteration. Both sides can cite data from this for their economic arguments, but in truth, the election wasn’t being fought on the economy or any other issue except for the personal qualities of the two major-party candidates. It seems doubtful that this unremarkable result will have any impact at all on voter decisions on Tuesday.

Advertisement

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
John Stossel 12:00 AM | April 24, 2024
Advertisement
David Strom 8:00 PM | April 23, 2024
Advertisement