IT’S JOBS, STUPID
The nation’s unemployment rate dropped to 6 percent in October as companies added thousands of new jobs for the third straight month, new evidence of an improving labor market.
The Labor Department reported Friday that payrolls grew by 126,000 last month, significantly more than the 50,000 new jobs that economists had predicted. That followed a revised 125,000 new jobs in September, which initially was reported at 57,000.
U.S. companies also added new jobs in August, marking three months of hiring gains following a sixth-month slump. October hiring occurred across a broad swath of the business landscape, including technical services, temporary employment firms, health care, social work, education and retail.
“We can finally put the nail in the coffin of the jobless recovery,” said Ken Mayland, president of ClearView Economics. “We are back on a rising job track.”
Good news, indeed. But, as usual, not universally so:
But the hard-hit manufacturing sector continued to shed jobs in October – 24,000 – and it was the 37th consecutive month of declines in that area. The pace of job loss, however, has slowed considerably.
The overall civilian unemployment rate improved from the standstill 6.1 percent level of the last three months.
Federal Reserve Chairman Alan Greenspan struck an optimistic tone about the employment outlook in a Thursday speech to the Securities Industry Association, saying hiring was expected to rebound.
“The odds … do increasingly favor a revival in job creation,” Greenspan said.
The jobs market has been the weak link in the robust recovery, with the economy growing at a sizzling 7.2 percent in the third quarter. Economists now believe the worst days are over, with significant hiring now occurring.
And you’ll be shocked to learn:
The improvement could benefit President Bush, who will be up for re-election next November. Democrats had hoped to use the lack of new jobs as a political issue to win back the White House, and indeed the election is still a year away.
Update (1117): Economist Brad DeLong doesn’t think the news is good so much as expectations are low.