Job Numbers Are Good, But Are They Good Enough?

by: Zacks Investment Research

More evidence that a double-dip recession is not in our future, the Bureau of Labor Statistics (BLS) released new employment numbers this morning. The results were positive: 151,000 non-farm payroll jobs were created in the month of October, way up from the revised September jobs number of a loss of 41,000 jobs. The September number had previously been reported as 95,000 jobs lost.

Earlier this week, ADP reported a gain of 43,000 jobs, which itself beat expectations by 20,000 or so. Likewise, this morning's BLS report was generally expected to add 60,000 jobs, though analysts had been upwardly revising their estimates of late. Even still, 159,000 private-sector jobs (the government cut 8,000 jobs in the month) easily beat expectations of all but the most optimistic of analysts.

The Federal government cut 8,000 jobs in October, clearly signaling that census-related layoffs are no longer a major factor. But job losses in the government have been and will continue to be expected, as payroll tax revenues languish with an overall unemployment rate of 9.6%, which was unchanged from September.

Goods-producing jobs were up 5,000, as were construction jobs. Though a modest increase overall, combined, both are very important indicators for the health of the economy. A large share of goods-producing jobs continue migrating to cheaper work forces overseas, and the construction industry continues to wallow in low demand for new housing and business construction.

The headline number of +151,000 is a clear positive, but does not come close to putting a serious dent in the overall unemployment rate. As we have been seeing in GDP growth numbers, we are stabilized but sluggish. The question remains: how will the economy find its way to meaningful employment growth?