This is getting repetitive. The October jobs report, out Friday morning, is very similar to the reports of recent months. Some 80,000 new payroll jobs were created, and the unemployment rate ticked down to 9.0 percent. It highlights a trend of an employment market that’s recovering very slowly, with workers eking out meager gains.
A few items worth noting:
The “conservative recovery” continues. For months we’ve been noticing that, every month, the private sector adds jobs while the public sector cuts them. It’s been the case for much of the past year that the U.S. economy is growing not because of government spending, but in spite of government cutbacks. In October, the private sector created 104,000 jobs, with gains led by professional and business services (33,000) and leisure and hospitality (22,000). Manufacturing posted a small 5,000 jobs gain. Meanwhile, governments at all levels cut 24,000 jobs. Since May 2010, government has cut one million jobs while the private sector has added 2.28 million positions.
Labor market frustration remains at high levels. The headline unemployment rate is only one of several data points contained in the report. And while the 9.0 percent rate is pretty dreadful, other metrics bear witness to a high and depressing level of labor market weakness. The unemployment rate for teenagers stands at 24.1 percent. The employment-population ratio checked in at a truly weak 58.4 percent. And the U-6, an alternate measure of unemployment that includes people who have given up people who are marginally attached to the workforce and people who are working part-time but would rather be working full-time, stands at 16.2 percent. That’s down from 16.5 percent in September 2011, and down from 17.0 percent in October 2010, but it’s still much too high.
Workers with jobs are making limited gains. While the number of jobs increased, the labor market remains remarkably loose. And that means corporations are able to get away with minimal wage increases. Average weekly earnings rose a smidge in October, to $795.42 from $793.70 in September. Average weekly wages are up just 1.8 percent in the past 12 months.
The trend is your friend. Each month, the Bureau of Labor Statistics looks back at the data reported in the prior two months and issues a revised figure on job creation. In the last two years, it has been common for prior months to be revised upwards. That trend continued. The August figure, previously reported as a gain of 57,000 jobs, was nearly doubled to a gain of 104,000 jobs. The September figure, originally reported as a 103,000 jobs gain was revised sharply higher to a gain of 158,000. In all, BLS discovered 102,000 jobs that it hadn’t noted previously. So far this year, then, the economy has added 1.435 million jobs.
Here’s something else that’s repetitive: The jobs market won’t do much to spur the bodies in Washington that have the ability to do something about the situation to act. The Federal Reserve is bound by its dual mandate to promote full employment. But Chairman Ben Bernanke on Wednesday essentially indicated that, even though the central bank is failing miserably at carrying out that mandate, he doesn’t plan to do anything. And Congress and the White House are locked in their usual cycle of dysfunction. President Obama has proposed a series of measures that economists and neutral organizations agree would spur job creation. Republicans in the House and Senate, aided by a few Democrats, choose not to pass them. It’s worth repeating: The recovery in the jobs market is taking place despite government, not because of it. And that’s likely to be the case for next month as well.