For the past four months, the U.S. economy has lost jobs. Yet, for all of those months private sector employment has grown. The net losses were driven primarily from temporary Census jobs ending. With those cuts mostly accounted for through September, did the U.S. finally see jobs begin to grow again overall? We'll find out Friday when the government releases the month's official unemployment report.
Some of the data we've been getting over the past week leading up to Friday's release has been modestly optimistic. This morning, the Labor Department released its report on weekly unemployment insurance claims. Initial claims don't appear to have changed much in October. The four week average ending October 30th was 456,000 claims, down just 800 from the five-week average ending October 2nd of 456,800. But continuing claims have shown more significant improvement. The three-week average ending October 23rd was 4,399,667, more than 100,000 fewer than the five-week average of 4,508,400 ending Oct 2nd. The hope, of course, is that these Americans aren't just seeing their unemployment benefits run out, but have found new jobs.
Another barometer of the labor market, by payroll specialist ADP (.pdf), was much better for October than September. For the earlier month, it first reported the worst result of the year -- 39,000 jobs lost, though this number was revised this week to a smaller change of just 2,000. Its October release reverses September's initial estimate, however. It says that 43,000 private sector jobs were added to the U.S. economy. That's the most since May.
Of course, firings also matter when calculating net job growth. To see how those changed in October, we can look to the Challenger, Gray & Christmas, Inc. report (.pdf) on job cuts. It says that layoffs increased by 2.2% during the month to 37,986. Although that's not great news, combining this with ADP's results suggests that fewer workers were cut than were added in October.
As far as political consequences, few job reports have been less significant over the past two years than October's release. A lame duck Congress is ruling, and Washington will look very different in a few months. That means Friday's report will be more important to economists than pundits. How do you think the labor market fared? Vote below!
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