Better employment numbers help ease recession fears
WASHINGTON – America’s private sector has added jobs three months in a row, the government reported Friday, a development that signals that the U.S. economy is leaving the recession further behind, though it’s still far short of robust growth.
Private employers added 104,000 jobs in October, the Labor Department said in its monthly jobs report, though a loss of 24,000 government jobs tempered that, leaving net employment growth at a weaker-than-hoped-for 80,000 for the month.
But upward revisions of previous months’ job estimates show that employers added more than 100,000 jobs in each of the last three months, offering a more encouraging picture than had been apparent in earlier reports.
Those numbers still won’t do much to knock down the jobless rate, which fell one-tenth of a percentage point in October to 9 percent, a rate that President Barack Obama, who’s facing re-election next year, said was too high.
“I have to tell you the least of my concerns at the moment is the politics of a year from now. I’m worried about putting people back to work right now, because those folks are hurting and the U.S. economy is underperforming,” Obama said during a news conference at the close of a summit in France with leaders of industrialized nations.
Economists on the left and the right seconded that view. They agreed that unemployment will remain high until the economy is creating more than 150,000 jobs monthly, the number that’s needed just to keep pace with new entrants into the job market.
“At this pace, we’re looking at sluggish growth, modest job creation and stubbornly high unemployment for the foreseeable future,” Martin Regalia, the chief economist for the U.S. Chamber of Commerce, said in a statement.
Heidi Shierholz, a labor economist with the liberal Economic Policy Institute, which favors more aid to the jobless and more government efforts to spark employment, agreed.
“At this rate, the labor market will never start putting the backlog of nearly 14 million unemployed workers back to work,” she wrote in an analysis. “In other words, given the enormous scope of the unemployment problem, this minimal level of job creation will keep us mired in disastrously high unemployment.”
Still, many economists found the report encouraging Friday.
“This is a very solid report, especially compared to much-diminished expectations,” said Mark Zandi, the chief economist for forecaster Moody’s Analytics. “The 80,000 gain in payroll jobs was on the light side, but there were big upward revisions to previous months. Household employment also increased strongly for the third consecutive month, suggesting that job growth at smaller establishments is firming.”
Economists were especially heartened by the upward revisions of previous employment estimates for August and September. The Bureau of Labor Statistics now estimates that there were an additional 47,000 private-sector jobs created in August and 55,000 in September.
“This report is significantly stronger than the headline employment gain would suggest and there is evidence that a trend to stronger job creation may be forming,” forecaster RDQ Economics in New York wrote in a note to investors.
Less encouraging, the hard-hit construction sector shed an additional 20,000 jobs in October. Manufacturing, which had been improving, was largely unchanged with the addition of just 5,000 jobs. Chad Moutray, the chief economist for the National Association of Manufacturers, was upbeat nonetheless.
“Despite the lower unemployment rate, these numbers continue to show an economy that is growing insufficiently to generate enough jobs. However, the net 5,000 increase in manufacturing employment was a nice improvement from the past two months, which experienced modest declines,” he wrote in his blog Shopfloor.org.
Also deep in the numbers, there was improvement in one of the bleakest indicators, the number of long-term unemployed. The number of people who’ve been jobless for six months or longer fell by 366,000 to 5.9 million. That’s a big drop, but the long-term unemployed still account for 42.4 percent of the 13.9 million jobless Americans.