October Jobs Report Shows Resilient Jobs Growth
Another month of resilient, but not noteworthy, jobs growth.
The final Jobs Report before Election Day, which also happens to fall on the eve of the next meeting of the Federal Reserve Board, shows that that jobs market for October continued its trend from last month of being resilient, but not exactly strong either:
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. (See table A-1.)
Among the major worker groups, the unemployment rate for Hispanics declined to 5.7 percent in October, while the rates for adult men (4.6 percent), adult women (4.3 percent), teenagers (15.6 percent), Whites (4.3 percent), Blacks (8.6 percent), and Asians (3.4 percent) showed little change. (See tables A-1, A-2, and A-3.)
The number of job losers and persons who completed temporary jobs declined by 218,000 over the month to 3.7 million. The number of long-term unemployed (those jobless for 27 weeks or more) was unchanged at 2.0 million in October and accounted for 25.2 percent of the unemployed. (See tables A-11 and A-12.)
In October, both the labor force participation rate, at 62.8 percent, and the employment-population ratio, at 59.7 percent, changed little. These measures have shown little movement in recent months, although both are up over the year. (See table A-1.)
(…)
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. (See table B-1.)
Health care employment rose by 31,000 in October. Within the industry, employment growth occurred in ambulatory health care services (+19,000) and hospitals (+13,000). Over the past 12 months, health care has added 415,000 jobs.
Employment in professional and business services continued to trend up in October (+43,000) and has risen by 542,000 over the year. Over the month, a job gain occurred in computer systems design and related services (+8,000). Employment in management and technical consulting services continued to trend up (+5,000).
In October, employment in financial activities continued on an upward trend (+14,000), with a gain in insurance carriers and related activities (+8,000).
Employment in other major industries, including mining, construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, leisure and hospitality, and government, changed little over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in October. In manufacturing, the workweek edged up by 0.1 hour to 40.8 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. (See tables B-2 and B-7.)
In addition to these numbers, the Bureau of Labor Statistics reported that the jobs number for August was revised upward from +167,000 to +17 6,000, and September was revised upward from +156,000 to +191,000, for total upward revisions of +44,000 new jobs created. This means that job growth over the past three months has averaged +176,000 new jobs, which is a slightly lower figure than the three-month average we saw last month thanks largely to the fact that the particularly strong figures from July have been taken out of the calculation of the average. Since the start of the year, Since the start of the year, the BLS has reported that 1,980,000 new jobs have created, for a monthly average of +198,000, which represents an increase in the year-to-date average over last month. Deeper into the report, we see that labor force participation and long-term unemployment showed few significant changes, although both numbers remain stuck in ranges that are less than desirable for the economy as a whole. The topline unemployment number, though, did fall from 5.0% to 4.9%, which at least on the surface is the kind of number that an incumbent politician likes to see heading into Election Day.
Looking beyond the jobs numbers, this month’s report showed solid wage growth continuing, which has been one of the positive parts of the economic statistics that have come out this year. For the month, average hourly earnings increased 10 cents to $25.92, which represents a 2.8% rise over the past year. The average hourly workweek, meanwhile, was largely unchanged across the board. Wage growth has been one of the most positive areas for 2016, and we’re now at the point where wage growth has increased at its strongest pace since the end of the Great Recession. So, arguably, one might say that Americans are more secure in their jobs and are earning more, which again is an interesting development on the ever of a Presidential Election.
The New York Times focuses on the potential political consequences of today’s report:
The government, delivering the last major snapshot of the economy before Election Day, reported on Friday that employers added 161,000 workers in October, a performance that suggested a healthy outlook for the months ahead.
The official unemployment rate dropped to 4.9 percent. And average hourly earnings rose 2.8 percent year over year, a level not reached since July 2008.
“It was pretty positive across the board,” said David Berson, chief economist at Nationwide Insurance, adding that “most importantly, we got a nice jump in average hourly earnings and that actually corresponds with other data.”
While the final weeks of the presidential campaign seemed to be preoccupied with everything but the economy, Friday’s reportfrom the Labor Department refocused attention — at least briefly — on the crucial bread-and-butter issue: jobs. For the candidates, the latest employment report serves as a Rorschach test, allowing each side to offer its own distinctive narrative of the economy’s performance and prospects.
Donald J. Trump, who was propelled to the top of the Republican ticket in part by nagging economic anxiety and a surge in voter anger among the white working class, has emphasized the negatives.
He has argued that jobs have been disappearing, highlighting the continuing loss of well-paid manufacturing jobs as production moves to other countries. October’s report showed continued decline in that sector, with the loss of 9,000 jobs.
The Democratic candidate, Hillary Clinton, by contrast, has emphasized the progress that President Obama made in digging the country out of the recession, pointing to the creation of roughly 15 million jobs since 2010.
The data on Friday also showed that more jobs were created in August and September than previously estimated. The revisions showed 44,000 more positions had been created, bringing the monthly average over the last three months to 176,000. Even more encouraging was the robust bump in wages, the most concrete sign that the labor market is tightening, and that ordinary workers are finally getting a slice of the rewards.
“This is money in the bank for workers feeling like they’ve been waiting a long time for this piece of the economic recovery puzzle to be added,” said Mark Hamrick, Bankrate.com’s senior economic analyst.
Jed Kolko, chief economist at Indeed, a jobs listing website, noted that the economy “set three post-recession records this month.” Wage growth is at its strongest point; the employment-to-population ratio for prime age workers reached 78.2 percent, its highest level since 2008; and the broadest measure of employment, which includes discouraged and underemployed workers, fell to 9.5 percent.
“These are all signs that the labor market continues to strengthen and is at its strongest point since the crisis,” Mr. Kolko said.
More than seven years after the recession ended, employment gains have been remarkably steady, finally leading to a rise in earnings in the last couple of years. But overall economic growth has remained modest and despite the recent improvements, the recovery has failed to deliver to many Americans the sense of job security and steady advancement that traditionally girds the middle class.
At this late date, it’s unclear exactly how much of an impact news like this is going to have on the outcome of the election. At this point, we’re headed into the part of the campaign where all the arguments about why you should vote for one candidate or the other start to matter less and getting voters to the polls start to matter more. At this point, both Trump and Clinton are concentrating more on get out of the vote rallies than they are on making for or against their own candidacies, and that’s likely to have a bigger impact on what happens on Tuesday than the fact that the unemployment rate fell one-tenth of one percent last month. That being said, the fact that we ended the election with a generally positive number, rather than a negative one that showed minimal job growth or a decrease in the number of people employed last month is certainly better news for incumbents in races at all levels. In the end, though, as I’ve said before, voters are more likely to vote based on how they feel about the state of the economy personally rather than generalized economic statistics like unemployment or Gross Domestic Product growth. That’s a much more difficult thing to measure, altough it is reflected somewhat in the bellwether ‘right track/wrong track’ poll, which has remained tremendously negative for nearly all of the Obama Presidency. The conventional wisdom has always been that a negative sentiment on this poll has been bad news for incumbents. In that respect, it’s worth mentioning that the gap now is much larger than it was in 2012. Whether that will have an impact on the outcome of the election is someting we’ll just have to wait to see.
Another way to write this headline is “Compared to Romney Plan, Obama Economy Blows The Doors Off.”
“Austerity Totally Bad Idea Proven Some More”
“Thanks Obama”
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
What’s that old saying Doug? Something about putting lipstick on a pig?
Compared to where we were on Inauguration Day 2009 the economic news has been good. Our economy has shown moderate and steady growth for over 70 consecutive months.
History will be kind in judging overall economic performance during the Obama administration.
These RCP Poll averages are confusing to me. You have POTUS Job Approval at 51.5 Approve and have POTUS Job Approval on Economy at 49.3, yet have Direction of country negative 63. It’s just odd – Oh wait, you have congress at 15 approval. So basically it equates to Congress is driving the country in a negative direction…yet the makeup of power of congress will likely not change. Huh?
Once again 35% of the economy is standing dead still. Public sector jobs are flat. Which means, on net, there are actually job losses.
And fools like John430 expect a different result?
This is an amazing economy…when you take into account the damage that Republicans have intentionally inflicted upon it.
Uh, these jobs have been in decline for decades. Lets look at All Employees: Manufacturing – which bottomed out at 11,453,000 in March 2010 and now stands at 12,258,000, some growth, albeit not that much, but growth/recovery of those lost – but then look at Jan 2003 at 14.9 Million, then right before the the crash 13.8 Million at Sept 2007. Back then it was not an issue for Donald as I am sure his clothing lines were a contributing factor
I wonder how many of the jobs created were from Fed. plans to help states out. How many of these jobs are temporary? Are these jobs part time? Will we ever have enough? I guess we just have to trust. We have to trust the government to fix the health care, the economy, the environment, the rest of the worlds problems. Hell they cannot fix their own problems and we expect them to fix these.
Is all unemployment equally bad? I know people who work in oil drilling. Rig counts and jobs are down in Oklahoma and Alaska because oil prices are down. I am filling my tank with $2.50 per gallon tax instead of $4.00 a short time ago. Doesn’t an unemployment rate that is very low reflect high demand and high prices? Five percent has long been regarded as the “natural rate” of unemployment as a result. A 100% unemployment rate for oncologists might not be so bad.
@barbintheboonies:
I assume you are talking about the America Recovery Act funds. Those are long, long gone.
Some number of jobs are always seasonal, especially around Christmas. I believe the employment rate numbers compensate, while the unemployment rate numbers do not. Others who know more might be able to shed more light.
Not in the employment numbers. In the unemployment, if someone stops looking for full time work because of a part time job then, yes, it would reduce the unemployment rate.
@barbintheboonies: Barb, you can review all the data from the release from the link at the top of Doug’s post. Of the 161K new jobs, 19K were government related. The BLS site can answer all your questions if you spend time reading and researching.
As an added fillip, the WSJ reached a new nadir today in their editorial page. In their hatchet job on Hillary Clinton — part 1 of a 2-part series on why they reluctantly support Trump — they made the following argument:
1. Obama wants to make America into a France-type socialist state. (I Am Not Making This Up.)
2. Progressive policies hurt the economy and jobs
3. Therefore the high unemployment and wage stagnation, especially among white males, is the fault of Libruls
4. High white male unemployment and wage stagnation lead to support for Trump
Therefore…
5. Trump’s popularity is the fault of Libruls
As usual, I don’t know whether to be more appalled that they might actually believe this, or that they would say it without believing it. (Ignoring for the moment that the damage was actually done on the GOP watch, and that Obama has been slowly repairing it despite the best efforts of Congress to keep scattering the pieces again…)
Dr Dave T, I saw an interview with a WSJ business reporter who said “We’re all embarrassed about the editorial page.”
@dxq:
gVOR’s rule: Conservatives come to believe their own bullshit.
@barbintheboonies: I’d be really interested in your proposal of who should “fix” healthcare, the economy, the environment, etc?
Seriously, would you propose that the insurance industry “fix” health care, and or that the environment be fixed by the energy industry.
So let us her your proposal for who, other than the guberment, should “fix” problems like this.
The president has taken economic mediocrity to a whole new level.
@john430: Firstly, we had a major hurricane impact the U S. in October which almost certainly drove the figure down. Secondly, it isn’t as though the President has a selector switch he can set to make sure each year is better than the last.
@Tyrell: No, George W. Bush did that with an eight-year run featuring net job creation of zero. Compared to that fool Obama is another FDR.
FTFY.
@Tyrell:
Let’s see:
Since the catastrophic Great recession of 2008, we have seen the unemployment reduced reduced from over 10% to 5%, GM was bailed out thereby preventing the loss of hundreds of thousand of jobs at a time when we were losing jobs at a rate of over 700,000/mo, the DJIA (where American business and citizens have significant investments) moved from 8,000 to nearly 18,000, and the overall economy has experienced 6 years (72 months) of positive growth in GDP.
If a Republican president had overseen those results – coming out of the worst economic collapse in 80 years – you would be calling for ticker tape parades across the country, and congressional conservatives would be renaming airports and cathedrals to honor that person.
@C. Clavin: Cliffie: Stick to your job as a burger flipper. You are way out of your league here.
@Jc:
Americans hate Congress…but they like their own representatives. And so it goes.
@Pch101: Yes, and the companion thought:
Americans are all for term limits….. but only for the other guy
@C. Clavin: Cliffie: Stay with your burger flipping job. You are way over your head here.
Another way to headline: Obama Recovery Shows Resilient Job Growth.
Arguably, one might also say “Thanks Obama”, given the state of the economy when he was inaugurated.This economic recovery didn’t come from unicorn tears and rainbows, you know, but from economic policies that actually worked. But I imagine that Doug is not there yet.
Meanwhile, Hillary has a pretty good argument that more of the same is just what we need. Hope that argument works.
@Jc: It’s not my Congressman that’s the problem; it’s the idiots/greedheads/communists that the 434 other legislative districts elected that’re bringing down our progress.