The October jobs report from the BLS showed a surprising "pop" in October. Analysts expected a lower number due to the government shutdown, but it seems to have had no effect. The national unemployment rate was unchanged at 7.3% which means there were 11.3 million unemployed workers out of a potential labor force of 142 million. There were postive revisions in the previous months NFP numbers.
The civilian labor force dropped by -720,000 people while the number of people employed decreased by -735,000 in October, however and estimated 448,000 workers were temporily furloghed from the federal government. The labor force participation rate was 62.8% and the employment to population ratio was 58.3%.
The private sector added 212,000 jobs while the government lost -8,000 jobs. While the national unemployment rate stayed at 7.3%, the black unemployment rate increased slightly to 13.1%. There were 4.1 million people classified as long-term unemployed (out of work for 26 weeks or longer). About 8.0 million people who were underemployed (working part time but wanted full time work). A total of 19.3 million workers were unemployed or underemployed (14.5% of the workforce).
The unemployment rate for women was calculated at 6.4% while the rates for other groups remained largely unchanged: men (7.0%), teenagers (22.2%), whites (6.3%), blacks (13.1%) and Hispanics (9.1%). Black teenage unemployment was 36%.
The Dow Jones Industrial Average jumped on the strong employment number reaching near 16,000.
In political economy news, the nation was distracted by issues with the healthcare.gove web site and JP Morgan reach the largest legal settlement ever recorded ($11B) over selling packaged fraudulet mortgages to investors.
The Big Story
The big story is the record number of people who are dropping out of the labor force. In October,according to the household survey, -720K people left the labor force. These numbers are still large even after you subtract the 450,000 forloughed government employees. The average for the past 12 months was a decline of -49,000. Huge numbers of whites and black are no longer participating in the labor force. Hispanic participation was steady by contrast.
Close to -250K white men , -218K white women, and -122K black men said they were no longer participting in the workforce. A very large decrease. In contrast, an additional 21,000 black women joined the labor force.
Black Unemployment
The black unemployment rate was set at 13.1%. The number of black people holding jobs shrank by -184,000 while the labor force was reduced by -158K causing a 0.3% increase in the unemployment rate. The 12 month average black unemployment rate was 13.3%
The black unemployment rate was set at 13.1%. The number of black people holding jobs shrank by -184,000 while the labor force was reduced by -158K causing a 0.3% increase in the unemployment rate. The 12 month average black unemployment rate was 13.3%
The chart below shows the slow decline in the national unemployment rate(U-3) and the recent flattening of the black unemployment rate at 13.1%. The chart also include an estimate of Black U-6 rate which represents everyone who wants to work or wants more hours if they were available.
Household Survey Details for October
As previously mention, there were huge drops in the labor force and the number of people working. The total labor force declined by 420,000 people while the number of people working was reduced by -735,000.
The long-term unemployed (27 weeks or more) was 4.1 million people which represents 36% of the unemployed. The median duration of unemployment was 16.3 weeks while the average duration was 36.1 weeks.
The “work part-time, wants full-time,” rose to 8.1 million. This is a measure of excess labor in the marketplace. About 2.3 million workers were marginally attached to the labor pool. They have looked for work in the last 12 months but not in the last four weeks. The report estimated that there were 815K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.
Both marginally attached and discouraged workers have been flat recently.
Both marginally attached and discouraged workers have been flat recently.
Establishment(Business) Survey Results for February
Non Farm Payroll increased by 204,000 which is well above the 12 month average of 170K jobs created. All of the private sector growth was in the service sector. Retail trade added 44,000 postions, business services jumped 44,000, healthcare increased by 18K and leisure services jobs jumped 53,000. Government lost -8,000 jobs. Construction added 11,000 while Manufacturing jump 19,000 and Temp Help only 3K.
Below is a chart of steady job growth which on average is about 170,000 jobs per month for the past year and 204,000 for October.
Below is a chart of the job gains in the non farm payroll categories. Temp help increased only 3K.
Non-Farm Payroll Revision
There were large upward revisions in the August and September NFP numbers. August shot up by +45K from +193K to +238K and September went from 148K to 163K and increase of +15K. The job market show little effect from the government shutdown.
The average work week was unchanged to 34.4 hours and average wages added 2 cent in October 2013 to $24.10..
ADP
ADP reported an increase in private payrolls of 130,000 positions for October. Small business (1-49 headcount) added 37,000 jobs; medium size (50-499) added 13,000 and large companies (500+) increased workers by 81,000.
It is economically unclear which types for firms create the "best" jobs for the overal US economy.
It is economically unclear which types for firms create the "best" jobs for the overal US economy.
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