For the first time since May, the U.S. has gained jobs. In October, 151,000 jobs were added to the economy, according to the Bureau of Labor Statistics. With temporary Census worker cuts nearly through in September, the government job losses are no longer crowding out private sector gains. But despite the increase in jobs, the unemployment rate remains unchanged during the month at 9.6%. That's better than the rise to 9.7% economists expected, and the 151,000 jobs added was more than double the 70,000 they predicted. Let's break down the numbers.
First, here's a chart showing how the rate has changed over the past two years:
As the months go by, and unemployment remains high, this chart is beginning to look very flat, near 10%. Here's another chart showing jobs added or lost each month:
You can also see here the distortion effect that Census jobs had on the labor market. They were artificially high the months leading into May, and lower than they would have been in the months leading into September. Friday's report also revised the number of jobs lost in August and September in the positive direction. In August, 41,000 were lost instead of 95,000 and in September 1,000 were lost instead of 57,000.
In October, total jobs added were much closer to the private sector labor market's performance than over the prior several months. Private firms gained 159,000 jobs. Here's how this part of the market has performed this year:
Private sector job growth still hasn't picked up the trend that was forming prior to June, but it's getting there.
A number of sectors did relatively well in October, adding net jobs:
Professional and business services were the standout sector with 46,000 more jobs, though most of those were due to 34,900 additional temporary positions. Retailers hired more aggressively, perhaps in preparation for the holiday season, with 27,900 jobs added. Health care continued to create more jobs in October with another 24,100. Two disappointing sectors were manufacturing and leisure & hospitality, which lost 7,000 and 5,000 jobs, respectively.
Unfortunately, unemployment duration continues to tick up on the long end:
The report shows 6.2 million Americans unemployed for more than 27 weeks. And that number would likely be even higher if discouraged workers were added in. The number of Americans who have temporarily given up looking for work hit another new high of 1.22 million:
The number of discouraged workers must decline eventually, but it clearly hasn't yet. The broadest measure of unemployment, "U-6," which includes those who are discouraged, marginally attached to the work force, or working part time because they can't find full time work, declined slightly in October to 17.0% from 17.1%. Obviously, underemployment is still disturbingly high.
Finally, the seasonally unadjusted unemployment rate continues to tick down, now to 9.0%. But until the seasonally adjusted rate also declines, that isn't extremely meaningful. Here's that chart:
Today's report provides some reason for optimism, as the U.S. economy has finally seen positive job growth, after four months of net declines. Moreover, private sector job growth was the highest since April. But in order to start to bring down the extremely high unemployment rate, and much higher underemployment rate, job growth will have to be stronger than we're seeing here.