Looks like a wash from today’s jobs report. The US economy added 171,000 jobs, slightly more than expected, but the jobless rate rose to 7.9% as the household survey adjusted from last month’s outlier. The October survey had 269,000 fewer part-time workers, almost half of the additional 582,000 added in September:
Total nonfarm payroll employment increased by 171,000 in October, and the unemployment rate was essentially unchanged at 7.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, health care, and retail trade. …
Both the unemployment rate (7.9 percent) and the number of unemployed persons (12.3 million) were essentially unchanged in October, following declines in September. …
The civilian labor force rose by 578,000 to 155.6 million in October, and the labor force participation rate edged up to 63.8 percent. Total employment rose by 410,000 over the month. The employment-population ratio was essentially unchanged at 58.8 percent, following an increase of 0.4 percentage point in September.
Economists expected an additional 125,000 jobs in today’s report, so this did beat expectations. Otherwise, it’s not terribly remarkable, and the bump upward in the jobless rate more or less counters whatever positive impact the jobs addition has. This is not enough to argue for a sustained jobs recovery or the beginning of a growth cycle; we saw better numbers in the first quarter, and those didn’t get sustained, either.
The U-6 number didn’t move much from the previous month. It was 14.7%, and it’s now 14.6%. When Obama took office, it was 14.2%; six months ago, it was 14.5%. The overall unemployment situation isn’t improving significantly at all. The number of people not in the workforce declined by 269,000, but at 88.341 million, it’s still higher than every month this year before August, and it’s 2.28 million higher than it was a year ago.
The participation rates are similarly depressed. The civilian population participation rate, which measures workforce participation in relation to population size, moved up from 63.6% o 63.8%. At the beginning of the Obama term, that was 65.7%, and it was 65.7% at the start of the Obama recovery in June 2009. The employment-population rate, which measures employment in relation to population size, rose one-tenth of a point to 58.8%. That was 60.6% at the start of Obama’s term, and was 59.4% at the start of the Obama recovery. We’re still in an unemployment trough, and 171,000 jobs isn’t nearly enough to make up that kind of ground, not even on a consistent basis, which we’ve hardly seen.
CNBC noted those metrics in an oddly positive light:
Economists had been expecting the report to show a net of 125,000 new jobs and a steadying of the unemployment rate at 7.8 percent. Nomura Securities predicted the rate would fall to 7.7 percent, but most expected no change.
Most of the job creation came in the services sector, with a gain of 150,000, while government employment rolls saw a collective decrease of 13,000.
A broader measure of unemployment that includes discouraged workers and those employed part-time who would rather work full-time ticked lower to 14.6 percent.
The labor force participation rate, a key metric that measures those working and looking for jobs, edged higher to 63.8 percent after wallowing around 31-year lows for the past several months.
Those numbers are still “wallowing around 31-year lows.”
James Pethokoukis puts it in perspective:
Obama WH predicted unemployment rate would be 5.2% in October 2012, not 7.9%. Missed it by thismuch
— James Pethokoukis (@JimPethokoukis) November 2, 2012
If we were seeing a late surge in real jobs growth — say, 250K+ per month for six months, the 7.9% jobless rate wouldn’t matter. On the other hand, I’m not sure that people absorb the actual number as much as they absorb their personal experience in the economy — which is why the U-6 number probably matters more, even if most people never hear about it.
The Labor Department reported Friday that despite 184,000 jobs being added to non-farm payrolls in October, average hourly earnings for such employees edged down by 1 cent to $23.58.
Average hourly earnings of private-sector production and nonsupervisory employees also dropped by 1 cent to $19.79.
This continues a trend reported by the Census Bureau in August finding that since the recovery began in June 2009, median household incomes have fallen 4.8 percent adjusted for inflation.
The decline in income relates directly to the health of the labor market. In a more competitive market, incomes will increase. This is as good a gauge as any, and again one that workers experience much more personally than U-3 or U-6 numbers.