By Dan Hamilton
Today’s jobs report indicates our labor markets remain in the doldrums. The unemployment rate fell slightly from 9.2 percent in September to 9.1 percent in October, but jobs increased by only 80,000. The 80 thousand job gain was the result of private gains of 104 thousand that were offset by government sector losses of 24 thousand.
The October jobs increase was below the revised September jobs increase of 158 thousand and below the July and August jobs increases.
Construction sector gains of 27 thousand in September were largely offset by 20 thousand in losses in October. The sector that gained the largest number of jobs was Professional and Business services with gains of 32,000 jobs. Other job-gaining sectors were Education and Healthcare, 28,000, Leisure and Hospitality, 22,000, and Retail, 18,000. Other sectors were little changed.
The long-term unemployed, i.e. those unemployed 27 weeks or more, fell from 6.2 million persons in September to 5.9 million persons in October. This is a seemingly welcome result, but it actually reflects more weakness in United States job markets. The decline is due far more to discouraged workers exiting the job market than to any underlying economic strength or job growth.
The broad measure of the unemployment rate, which includes persons marginally attached to the labor force and persons employed part time for economic reasons, fell from 16.5 percent in September to 16.2 percent in October.
Today’s jobs report indicates a labor market that still remains weak, with slow job creation and a high unemployment rate. I have argued in this blog-space that significant household sector debt reduction still needs to occur to get back to a healthy economy. Debt reduction has always been, and will always be, a long and painful process, particularly when a key asset price, housing, remains low.