A Good Jobs Report, But We’re Still Waiting For The “Great” One

Another mostly good, but not great, jobs report.

Now Hiring Sign

For the most part, the monthly jobs reports issued by the Bureau of Labor Statistics for the balance of 2014 have been fairly good. With few exceptions, they have exceeded expectations and been about the level of 200,000 net jobs created that, while not really anything spectacular to write home about, at least seemed to be trending upward and indicating that the underlying economy itself was steadily improving as we work our way through the fifth year of the recovery from the Great Recession. Heading into today’s release of the October report, the consensus forecast seemed to place job growth somewhere north of 210,000 net new jobs which is basically right where we ended up:

Total nonfarm payroll employment rose by 214,000 in October, and the unemployment rate edged down to 5.8 percent, the U.S. Bureau of Labor Statistics reported today.  Employment increased in food services and drinking places, retail trade, and  health care.

Both the unemployment rate (5.8 percent) and the number of unemployed persons (9.0 million) edged down in October. Since the beginning of the year, the unemployment rate and the number of unemployed persons have declined by 0.8 percentage point and 1.2 million, respectively. (See table A-1.)

(…)

Total nonfarm payroll employment increased by 214,000 in October, in line with the average monthly gain of 222,000 over the prior 12 months. In October, job growth occurred in food services and drinking places, retail trade, and health care. (See table B-1.)

Food services and drinking places added 42,000 jobs in October, compared  with an average gain of 26,000 jobs per month over the prior 12 months.

Employment in retail trade rose by 27,000 in October. Within the industry, employment grew in general merchandise stores (+12,000) and automobile dealers (+4,000). Retail trade has added 249,000 jobs over the past year.

Health care added 25,000 jobs in October, about in line with the prior 12-month average gain of 21,000 jobs per month. In October, employment rose in ambulatory health care services (+19,000).

Employment in professional and business services continued to trend up over the month (+37,000). Over the prior 12 months, job gains averaged 56,000 per month. In October, employment continued to trend up in temporary help services (+15,000) and in computer systems design and related services (+7,000).

In October, manufacturing employment continued on an upward trend (+15,000). Within the industry, job gains occurred in machinery (+5,000), furniture and related products (+4,000), and semiconductors and electronic components (+2,000). Over the year, manufacturing has added 170,000 jobs, largely in durable goods.

Employment also continued to trend up in transportation and warehousing (+13,000) and construction (+12,000).

Employment in other major industries, including mining and logging, wholesale trade, information, financial activities, and government, showed little change over the month.

In addition, there were revisions to the numbers from August and September, with the net new jobs number for August revised upward from 180,000 to 203,000 and the number for September being revised upward from 248,000 to 256,000. Among other things, this means that the average net new jobs number for the past three months stands at 224,333. These adjustments mean that there have been at least 200,000 new jobs created in each month in 2014, with the economy averaging 222,000 net new jobs for the past ten months, a number that would top previous years since the end of the Great Recession if it is sustained by the jobs reports for November and December. There was a slight increase in the Labor Force Participation Rate, but the overall Employment Rate remained unchanged. Nonetheless, U-6, the broadest measure of unemployment that the BLS measures, decreased from 11.8% to 11.5%, a good sign of the broadness of the jobs situation that goes beyond the more superficial top-line U-3 number, which also decreased to 5.8%. On the whole, these are good but not great numbers, but ones that seem to be steadily improving, which has largely been the story for 2014.

CNBC notes that today’s numbers were somewhat off expectations, and  The New York Times summarizes the data this way, tying it into the election results and the fact that economic anxiety is still a reality for many Americans:

Three days after voters expressed their discontent with the state of the economy, the government on Friday reported further signs of improvement, estimating that employers added 214,000 jobs in October, while the official jobless rate dropped to 5.8 percent.

The increase was behind the average monthly employment gain of 227,000 so far this year.

Analysts surveyed by Bloomberg had expected an increase of 235,000 jobs last month.

This latest report represents 56 consecutive months of private-sector job growth, which Jason Furman, chairman of President Obama’s Council of Economic Advisers, characterized this week as “the longest streak in U.S. history.”

Yet, as Mr. Furman and other economic experts readily acknowledge, the experience of many Americans does not match the cautious optimism about the job market and the overall economy recently expressed by several analysts.

Election Day exit polls found that 78 percent of those surveyed were very or somewhat worried about the future direction of the economy, while two-thirds said they believed the economy was getting worse.

For many Americans, it still is. Even though the recovery from the recession is in its sixth year, stagnant wages, an economy generating jobs mostly at the bottom and the top rather than in the middle, and vast disparities between the rewards bestowed on the rich and on ordinary workers have left many people disenchanted with their economic prospects.

Some analysts now see signs that a tighter labor market may lead to higher wages in the near future. “The job market is steadily picking up pace,” said Mark Zandi, chief economist at Moody’s Analytics, reacting to a report from the payroll processor ADP this week that private sector employment increased by 230,000 jobs in October.

“The job market will soon be tight enough to support a meaningful acceleration in wage growth,” he added.

That last emphasis on wages is important, and an element of the Jobs Report that is often ignored in favor of the bigger numbers about employment rates and net jobs created. In reality, though, the wage  figure is probably the most important number in the reports now that we are at the point where we can say that the jobs recession that was a huge part of the Great Recession, and which continued even as the economy recovered, is pretty much over. Now, the question isn’t simply whether jobs are being created, although that is certainly important, but how much those jobs, and existing jobs are paying. One reason for that, of course, is that more money in the pockets of workers is part of the cycle that helps keep the economy growing, which in turn helps to create more jobs. If wages aren’t growing at the same time that prices are rising, then the economy will be impacted and that in turn will have an impact on job creation. Another reason that wages are important, of course, is that wage levels are an important factor along with job availability that will attract people still sitting on the sidelines back into the job market. At the same time, though, employers are unlikely to significantly raise wages unless the supply of availability labor reaches the point where it becomes necessary to do so to attract or retain workers. In some sense, then, it is a classic example of the supply and demand curve in  action. So, the fact that wage growth remains flat is worth paying attention to as we go forward, perhaps even more so than job creation and U-3 themselves. One factor that may be helpful in this regard at least in the short term future is the fact that oil prices continue to fall, and this has had an impact on prices for gasoline, heating oil, and other forms of energy. This means that there will be more cash in people’s pockets at least in the short term, and that is likely to encourage spending as we head into the most important part of the year for retailers and other businesses. Because of that, we could see healthy jobs numbers in both November and December as employers boost hiring for the Christmas shopping season. Many of those jobs will be temporary, of course, but they could help to boost economic growth enough to have a more positive overall impact.

As with previous reports this year, today’s report isn’t one that can be classified as great, but it’s good, and its consistent with the idea of slow and steady progress. the question now is whether that will continue and whether it will lead to a real revving up of the economy and the jobs engine or whether this is the new normal.

FILED UNDER: Economics and Business
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020.

Comments

  1. C. Clavin says:

    The recovery continues…56 straight months of Private Sector job creation under Obama the socialist tyrannical Muslim dictator…over 10.5 million Private Sector jobs.
    The recovery continues to be held back by Republican political tactics…they account for the loss of over 2 million jobs on net.
    If you are looking for a great jobs report then the Public Sector can’t continue to be held to net losses. This is just reality. And not a single Republican that was elected Tuesday night is smart enough to understand it.
    http://stateofworkingamerica.org/charts/total-job-change-for-public-sector-workers-since-the-start-of-each-of-the-last-four-recoveries/

  2. DA says:

    Given that it’s a good number, with unemployment down and participation up, I was wondering what angle Doug would take to be negative.

  3. michael reynolds says:

    People are waiting for a return to a mythical time. I don’t mean mythic — mythical. Their points of reference are the tech bubble and the housing bubble both of which gave people the illusion of wealth and created relatively high-paying jobs in tech and construction and real estate sales, etc…

    Of course we saw where the bubbles took us.

  4. Jeremy R says:

    Since the GOP will be heading both Houses soon I imagine we’re nearing the point where they’ll stop talking down every jobs report, their media outlets will go back to only caring about the U3 unemployment rate, and their 527/501c3 proxies will stop the perpetual onslaught of economic doom-saying advertising? You can’t very well be trashing the economy when you pivot to claiming credit for it (“The Republican Recovery”).

  5. gVOR08 says:

    If we continue, demand will force wages to rise and the GOPs in Congress will take credit for it. If the Europeans drag us back into recession, the GOPs in Congress will blame Obama. Otherwise, the GOPs in Congress will do nothing about jobs. Fearless prediction, no? 😉

  6. Rick DeMent says:

    Well after they repeal Obamacare just watch wages skyrocket … Bawwww ha ha ha ha!!!!!!!

  7. michael reynolds says:

    @Jeremy R:

    Yeah, but then by 2016 they have to find a way to blame Hillary for all manner of economic horrors. It’s going to be confusing, but I’m confident that Fox News is up to the job of convincing the base that the economy is simultaneously great because of the GOP Congress and awful because of that Kenyan.

  8. al-Ameda says:

    Again, a reminder …

    The financial crash of 2008 caused the vaporization of approximately 25% of the wealth of American businesses and households – about $18 trillion, and the precipitous loss of millions of jobs.

    For an extended period from 2008 into 2009 the economy was shedding jobs at a rate of over 700,000 per month. Since the fiscal stimulus and QE measures took hold we’ve had over 50 consecutive months of growth in economic output, a steady reduction in the unemployment rate (from over 10% down to under 6%) and instead of superheated “bubble” growth we’ve had steady growth in the range of 2%-4%.

    It is also instructive to note that America is one of the few countries that implemented a regimen of QE and stimulus in the face of severe recession, and we are one of the few nations that is experiencing decent economic performance.

    Predictably, Republicans blame the president’s policies for a lack of wage growth. It’s specious , as that is a phenomenon that has been with us for decades now. The primary beneficiaries of compensation growth during the last 3 economic booms have not been the middle class, it has been the highest levels of income earners.

  9. Moosebreath says:

    @al-Ameda:

    “Predictably, Republicans blame the president’s policies for a lack of wage growth. It’s specious , as that is a phenomenon that has been with us for decades now. The primary beneficiaries of compensation growth during the last 3 economic booms have not been the middle class, it has been the highest levels of income earners.”

    And policies Republicans advocate (union busting, wealth transfers to the upper class through tax cuts and welfare reform, cutting middle class government jobs, etc.) have had a large effect on lack of middle class wage growth over the last few decades.

  10. C. Clavin says:

    So maybe Doug’s right and this is a good, but not Great jobs report.
    Let’s try this headline on for size:

    THIS IS THE LONGEST STREAK OF PRIVATE SECTOR JOB CREATION IN HISTORY.

    Yeah…Obama is outperforming Reagan in private sector job creation. Of course Reagan exploded the size of Government. So he had that advantage.
    Based on the facts…Reagan was a Socialist…and Obama isn’t. Who’da thunk it?

  11. Slugger says:

    One of the main characteristics of all economies is that they cycle up and down. Things get better, and then things get worse. More and more, I find myself thinking that our economists are chicken entrail readers who claim more understanding than they actually have and our politicians are front-runners and gravytrainers claiming to lead forces that they do not understand. My default on the recent improvements in the economy that it is a deviation toward the mean rather than a brilliant social engineering feat.
    I have personal affinity for the left, but I think that Tolstoy was right in giving us the image of Napoleon as a little kid riding inside the carriage of history pretending to be the driver.

  12. stonetools says:

    The sad thing is that the party that saved the country from a second Great Depression, saved the auto industry, resisted what would have been a disastrous move to austerity, and reformed the financial industry got screwed by the voters, whereas the party who drove the economy off the cliff, then did everything possible to sabotage the recovery was rewarded by the voters. Moreover, they stand to benefit from the continuing recovery when they run for re-election in 2016. How did that happen? Seriously, WTF?

    Dan Drezner nails it:

    And here we get to Obama and the midterms. As he noted last month, his policies were on the ballot this week, even if he wasn’t. At his news conference on Wednesday, he said the following:

    This country has made real progress since the crisis six years ago. The fact is, more Americans are working. Unemployment has come down. More Americans have health insurance. Manufacturing has grown. Our deficits have shrunk. Our dependence on foreign oil is down, as are gas prices. Our graduation rates are up. Our businesses aren’t just creating jobs at the fastest pace since the 1990s. Our economy is outpacing most of the world.

    Here’s the thing about that paragraph: Obama might be slanting the facts in a self-serving manner, but that doesn’t change the fact that he’s basically right. Critics like Paul Krugman and Noam Scheiber have recently acknowledged that, given the hand they were dealt, the Obama administration did a pretty good job of shepherding the country through the Great Recession. Indeed, as even the Washington Examiner’s Joseph Lawler points out:

    The unemployment rate has fallen by nearly three percentage points and the U.S. economy has added 4.6 million jobs since President Obama won re-election in November 2012, but voters in the midterm elections gave him no credit for the improvement….

    [O]nly 45 percent of voters listed the economy as the top problem facing the country, down from nearly 60 percent in 2012 and 63 percent in 2010. Seven in 10 said the economy was in bad shape, but that number also declined from previous elections.

    So, in other words, despite Obama’s belief that good policy led to good results, voters haven’t made that basic connection.

    I’m a broken record here, but the Democrats have a messaging problem. Obama wrongly thought that the Republicans would have no credibility after the 2008 financial crisis, and never truly hammered into the heads of the public just how big a disaster was the 2008 crisis. He should have made it clear that if we did nothing (the Republican response) we would be looking at 15-20 per cent unemployment and the banking system collapsing, just like the 1930s. Hell, he should have invoked war analogies, hammered Republican mistakes, and did the full FDR 100 days approach. Instead, he downplayed the crisis, pretended the $800B stimulus was really just what was needed, and ignored the advice of Krugman and his advisers that the stimulus was much too small.He also mollycoddled the banks and did nothing for the mortgage holders.
    All this meant that when unemployment soared past 10 per cent in 2010, he had no response to the Republicans “Where are the jobs” message. A dispirited Democratic coalition didn’t show up for the 2010 elections, and the rest is history.
    Despite all that, the stimulus was the right approach. What was wrong was the terrible messaging that let the Republicans get away with saying that the stimulus didn’t work at all and that their do nothing approach was better.Anyway, this post is getting too long. Just had to vent.

  13. Modulo Myself says:

    @stonetools:

    This isn’t about the messaging. The problem is the product. Obama is selling normal American hard-work and social mobility. You work hard, you engage with people, you learn how to handle the ups and downs, and you can succeed. QED. Everything else–government, taxes, political correctness–is just bs voiced by losers, and by pr firms representing tedious interests.

    Though the people voting against Obama won’t say it, they people who believe (rightfully, I believe) that they no longer can do this.

    The only alternative to American mobility is an egalitarian society, but I guarantee you that the average Republicans wants the exact the opposite: they just don’t want their position on the hierarchy.

  14. anjin-san says:

    @ Doug

    the question isn’t simply whether jobs are being created, although that is certainly important, but how much those jobs, and existing jobs are paying.

    Compensation for CEOs and other senior executives is robust, to say the least. That is what the US economy in 2014 is geared towards. What are you complaining about?

  15. Cecil the Turtle says:

    Ha! Republicans took control of congress three days ago and turned things around already. See what can happen when we eliminate the obstructionist tactics of the Democrats?

  16. Moosebreath says:

    Matt Yglesias has a good take on the state of the economy, which begins:

    “1. In October of 2012, the jobs report showed 114,000 jobs created and an unemployment rate of 7.8 percent. That was considered such good news for Obama’s reelection prospects that Jack Welch immediately accused the administration of cooking the books.

    2. 25 months later, the jobs report showed 214,000 jobs and an unemployment rate of 5.8 percent. The economy’s been adding jobs at a pace of over 220,000 per month all year, and the current string continuous months of job growth is the longest on record.”

    And yet Obama’s handling of the economy was considered a drag on Democratic candidates.

  17. michael reynolds says:

    In addition to handling the Near Depression better than just about any other developed nation, Mr. Obama is also proving his foreign policy critics to be as full of crap as his domestic critics. From the unlikeliest of sources, Fox News:

    BEIRUT – For a force that has built its reputation on an aura of momentum and invincibility, the Islamic State group is now dealing with a series of military setbacks in Iraq and a prolonged stalemate in the small Syrian border town of Kobani.

    Gone are the days when IS was able to seize territory in both countries with relative ease. Its newfound problems, including a loss of oil revenue, raise questions about the extent to which it will be able to continue recruiting fighters who want to be with a winner.

    Obamacare working exactly as Mr. Obama predicted it would, unemployment and underemployment falling, GDP up, deficit down, and ISIS is in a box (told you so on that last, told you so, and I’m going to keep telling you so.)

  18. al-Ameda says:

    @Moosebreath:

    And yet Obama’s handling of the economy was considered a drag on Democratic candidates.

    Democratic candidates were cowardly, they refused to counter punch lying Republicans on this and they paid a price for it. Also, for 6 years, Obama has declined to attack Republicans, or to counter their misstatements, he and his party have paid for this.

  19. stonetools says:

    @Moosebreath:


    And yet Obama’s handling of the economy was considered a drag on Democratic candidates.

    It’s messaging. The Republicans have their right wing BS Machine blasting out how terrible is economy is, where is the recovery, and how all this is Obama’s fault-with no defense whatsover from the Democrats. Obama is to blame too. He is just not great at blowing his own horn. Also too, his crisis management, while effective, is just too cool for America.

    Six years in, it’s clear that Obama’s presidency is largely about adhering to intellectual rigor—regardless of the public’s emotional needs. The virtues of this approach are often obscured in a crisis, because Obama disdains the performative aspects of his job. “There’s no doubt that there’s a theatrical nature to the presidency that he resists,” Axelrod says. “Sometimes he can be negligent in the symbolism.” …

    It’s often said in Washington that the best politics is good policy. That hasn’t been Obama’s experience. Dragged down by Ebola and other headaches, his approval rating has dropped to 40 percent, the lowest yet in his presidency. Democrats are on the verge of losing the Senate partly as a result

    The rational side of me thinks this is BS. But really, I’m thinking maybe Obama should have landed on an aircraft carrier or two.

  20. stonetools says:

    @michael reynolds:

    Obamacare working exactly as Mr. Obama predicted it would, unemployment and underemployment falling, GDP up, deficit down, and ISIS is in a box (told you so on that last, told you so, and I’m going to keep telling you so.)

    Does Doug ever admit he’s wrong, I wonder? Maybe right winger pundits swear a secret oath never to do so.

  21. John425 says:

    Yet another of Doug’s colleagues, (Patterico.com) sees it differently and notes that the only figure to watch is the one I bolded.

    From the report….

    In October, the number of long-term unemployed (those jobless for 27 weeks or
    more) was little changed at 2.9 million. These individuals accounted for 32.0
    percent of the unemployed. Over the past 12 months, the number of long-term
    unemployed has declined by 1.1 million. (See table A-12.)

    The civilian labor force participation rate was little changed at 62.8 percent
    in October and has been essentially flat since April.
    The employment-population
    ratio increased to 59.2 percent in October. (See table A-1.)

    The number of persons employed part time for economic reasons (sometimes
    referred to as involuntary part-time workers) was about unchanged in October
    at 7.0 million. These individuals, who would have preferred full-time employment,
    were working part time because their hours had been cut back or because they
    were unable to find a full-time job. (See table A-8.)

    In October, 2.2 million persons were marginally attached to the labor force,
    little changed from a year earlier. (The data are not seasonally adjusted.)
    These individuals were not in the labor force, wanted and were available for
    work, and had looked for a job sometime in the prior 12 months. They were not
    counted as unemployed because they had not searched for work in the 4 weeks
    preceding the survey. (See table A-16.)

    Nothing to crow about, libtards.

  22. anjin-san says:

    @John425:

    In October, the number of long-term unemployed (those jobless for 27 weeks or
    more) was little changed at 2.9 million.

    It’s a bad situation. If you have been out of work for 6 months, you probably won’t even get an interview. The free market has spoken.

    So then, government intervention is probably called for to help these folks get going again. Guess which party won’t allow that to happen.

    libtards.

    Are you having milk and cookies after playtime is over?

  23. John425 says:

    @anjin-san: Putting them on the dole is not what they want. They deserve a more private-enterprise friendly environment that can create jobs. This Administration is determined to keep that from happening. Libtards is a mild expletive compared to the trash talk that your compadres say on this blog.

  24. al-Ameda says:

    @John425:

    Libtards is a mild expletive compared to the trash talk that your compadres say on this blog.

    Oh look … , “both sides do it”
    Yeah, right.

  25. C. Clavin says:

    People looking for something, anything, to complain about…because they need something, anything, to complain about…keep pointing to the labor participation rate. But they have absolutely no friggin’ idea why that rate is low…they just know it’s something somebody at a right-wing nut job site told them to complain about.

    Probably half that number represents baby boomers retiring.
    Why doesn’t John425 want baby boomers to retire?

  26. Tony W says:

    @John425:

    The civilian labor force participation rate

    What a crock.

    Since you are losing on the standard metrics we’ve been using for 80 years to measure the economy (unemployment, stock market growth, etc.), you just make up new ones?

    Why, pray tell, is the “civilian labor force” more important, say, than the military or other non-civilian? Does their money spend differently? And, some advice: If you’re going to spend time rooting around to find some category of the economy that is worse off after six years of careful management following the Republican frat party of 2000-2008, maybe you should choose a category in which people are actually worse off, not “Flat”.

  27. anjin-san says:

    @John425:

    They deserve a more private-enterprise friendly environment that can create jobs.

    Well, the Bush administration was all about being private-enterprise friendly. They basically said “do whatever you want, just make money.”

    How was the job market when Bush left office?

    Putting them on the dole

    Where did I mention putting anyone “on the dole”?

  28. Hal_10000 says:

    People are waiting for a return to a mythical time. I don’t mean mythic — mythical. Their points of reference are the tech bubble and the housing bubble both of which gave people the illusion of wealth and created relatively high-paying jobs in tech and construction and real estate sales, etc…

    I would agree with that to some extent. I think the 90’s boom was real because of the broad wage growth. But the 00’s economy was an illusion. However … that mythical economy is what the Keynesians are using as the reference point for where the stimulus should have taken us.

    If we continue, demand will force wages to rise and the GOPs in Congress will take credit for it. If the Europeans drag us back into recession, the GOPs in Congress will blame Obama. Otherwise, the GOPs in Congress will do nothing about jobs. Fearless prediction, no

    No more fearless than my prediction that OTB commenters will continue to credit Obama whenever we get good economic news and blame Republicans when we get bad news. That pattern is holding perfectly.

  29. anjin-san says:

    @Hal_10000:

    OTB commenters will continue to credit Obama whenever we get good economic news and blame Republicans when we get bad news. That pattern is holding perfectly.

    Well, the GOP left us on the verge of a depression, and taken as an aggregate, economic news under Obama has been decent to very good. Can you explain where commentators holding to “the pattern” are wrong?

  30. bill says:

    ironically i was listening to npr today- they actually were reporting on unemployment and even had the nads to mention the “long term” ones who gave up on looking- hence aren’t counted in the “official” numbers. of course it’s a few days after the election so it was safe to talk about it…they surprise me every once in a while.

  31. John425 says:

    @C. Clavin: Cliffie, Cliffie- it wasn’t a right-wing blog that wrote it, it was a federal report. The attorney who did post it noted it as a line item. Now, I know that’s a complicated concept for you but do try to keep up.

  32. John425 says:

    @Tony W: Math must be hard for you. The population number was “flat” As in no better. That points to failure to grow the economy. Do you just sit and drink with Cliff Clavin or are you his dumber twin?