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Modest Growth in Jobs Seen in Final Report Before Election Latest Jobs Report Shows Persistent Economic Growth
(about 1 hour later)
In the last assessment of the job market before the presidential election, the Labor Department announced Friday that the nation’s employers added 171,000 positions in October, and more jobs than initially estimated in both August and September. The nation’s employers added 171,000 positions in October, the Labor Department reported on Friday, and more jobs than initially estimated in both August and September. Hiring was broad-based, with just about every industry except state government adding jobs. The unemployment rate ticked up slightly to 7.9 percent in October from 7.8 percent in September, because more workers joined the labor force and so officially became counted as unemployed.
The unemployment rate ticked up slightly to 7.9 percent in October, from 7.8 percent in September, as more workers joined the labor force and so officially became counted as unemployed. None of this makes for a game-changer in the presidential election, analysts said. But it appeared to provide some comfort for President Obama, whose campaign could have been sideswiped by bad news from the notoriously volatile monthly jobs report.
The report showed persistent but modest improvement in the American economy, and broad-based gains in just about every industry except the government. It was based on surveys conducted too early in the month to capture work disruptions across the East Coast caused by Hurricane Sandy. In fact, the latest numbers show that the economy has finally added a net number of new jobs under his presidency. The report also allayed widespread suspicion that September’s plunge in the unemployment rate — to below 8 percent for the first time since the month he took office — might have been a one-month statistical fluke.
“Generally, the report shows that things are better than we’d expected and certainly better than we’d thought a few months ago,” said Paul Dales, senior United States economist for Capital Economics. “But we’re still not making enough progress to bring that unemployment rate down significantly and rapidly.”“Generally, the report shows that things are better than we’d expected and certainly better than we’d thought a few months ago,” said Paul Dales, senior United States economist for Capital Economics. “But we’re still not making enough progress to bring that unemployment rate down significantly and rapidly.”
The latest figures are probably good news for President Obama. They officially recorded a net gain in jobs under his presidency, and they allayed widespread suspicion that September’s large drop in the unemployment rate — below 8 percent for the first time since the month he took office — might have been a one-month statistical fluke. Mitt Romney, the Republican presidential nominee, said in a statement that the jobs report was evidence of the need to change the nation’s economic policies.
In a statement, Alan B. Krueger, the chairman of Mr. Obama’s Council of Economic Advisers, said Friday’s report provided “further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression.” “Today’s increase in the unemployment rate is a sad reminder that the economy is at a virtual standstill,” he said. He also noted that October’s unemployment rate of 7.9 percent was higher than the 7.8 percent when Mr. Obama took office in January 2009.
Mitt Romney, the Republican presidential nominee, said in a statement that the jobs report is evidence of the need to change the nation’s economic policies.
“Today’s increase in the unemployment rate is a sad reminder that the economy is at a virtual standstill,” he said.
The numbers arrived somewhat late in the game to have a huge impact on the election next Tuesday, particularly given the ongoing focus on Hurricane Sandy.
Economists were hopeful that once the election was over and Congress addressed the major fiscal tightening scheduled for the end of this year, job growth could speed up further.Economists were hopeful that once the election was over and Congress addressed the major fiscal tightening scheduled for the end of this year, job growth could speed up further.
“If we can do this kind of job growth with all the uncertainty out there, imagine if we were to clear up those tax issues and hold back the majority of tax increases that are pending at the end of the year,” said John Ryding, chief economist at RDQ Economics. “We could do much better in 2013, maybe as well as we appeared to be doing earlier this year.”“If we can do this kind of job growth with all the uncertainty out there, imagine if we were to clear up those tax issues and hold back the majority of tax increases that are pending at the end of the year,” said John Ryding, chief economist at RDQ Economics. “We could do much better in 2013, maybe as well as we appeared to be doing earlier this year.”
Job gains in previous months were revised to show bigger gains. September’s increase of 114,000 new jobs was revised to 148,000, and August’s 142,000 was revised to 192,000, the government said.
In October, the biggest job gains were in professional and business services, health care and retail trade, the Labor Department said. Government payrolls dipped slightly. State and local governments have been shedding jobs most months over the last three years.In October, the biggest job gains were in professional and business services, health care and retail trade, the Labor Department said. Government payrolls dipped slightly. State and local governments have been shedding jobs most months over the last three years.
One of the lowlights of the report was in hourly wages, which remained flat in October after showing barely any growth in the previous several months.One of the lowlights of the report was in hourly wages, which remained flat in October after showing barely any growth in the previous several months.
“Perhaps the decline in real wages is a factor here in being able to employ more people,” Mr. Ryding said. “It’s something to keep in mind when we think about creating jobs and whether we’re maybe creating the wrong sort of jobs.”“Perhaps the decline in real wages is a factor here in being able to employ more people,” Mr. Ryding said. “It’s something to keep in mind when we think about creating jobs and whether we’re maybe creating the wrong sort of jobs.”
A report from the National Employment Law Project, a liberal research and advocacy organization that focuses on labor issues, found that while the majority of jobs lost in the downturn were middle-wage jobs, the majority of the jobs created since then have been lower-wage ones.A report from the National Employment Law Project, a liberal research and advocacy organization that focuses on labor issues, found that while the majority of jobs lost in the downturn were middle-wage jobs, the majority of the jobs created since then have been lower-wage ones.
There have now been 25 straight months of jobs gains in the United States, but the increases have been barely large enough to absorb people entering the work force. A queue of about 12 million unemployed people remain waiting for work, about two out of five of whom have been out of a job for more than six months. There have now been 25 straight months of jobs gains in the United States, but the increases have been barely large enough to absorb the increase in the population. A queue of about 12 million unemployed people remain waiting for work, about two out of five of whom have been out of a job for more than six months.
That is in addition to more than eight million people who are working part-time but really want full-time jobs.That is in addition to more than eight million people who are working part-time but really want full-time jobs.
“I’m not just competing against all the other people who are out of work,” said Griff Coxey, 57, of Cascade, Wis., who was laid off in May from his controller job at a small business. “I’m also competing against all those people who are actually working but are underemployed.”“I’m not just competing against all the other people who are out of work,” said Griff Coxey, 57, of Cascade, Wis., who was laid off in May from his controller job at a small business. “I’m also competing against all those people who are actually working but are underemployed.”
Like two million other idle workers, Mr. Coxey is scheduled to lose his unemployment benefits the last week of the year, when the federal extensions abruptly expire. He said he still has some savings to fall back on, but many workers do not.Like two million other idle workers, Mr. Coxey is scheduled to lose his unemployment benefits the last week of the year, when the federal extensions abruptly expire. He said he still has some savings to fall back on, but many workers do not.
Labor advocates and economists are hopeful that Congress will renew the benefits as part of their discussions of the “fiscal cliff” during their postelection session. So far, though, the issue has received little attention, and analysts worry that ending extended benefits could disrupt what modest forward momentum the economy currently has. Labor advocates and many economists have been urging Congress to renew the benefits as part of their discussions of the “fiscal cliff” during their postelection session. So far, though, the issue has received little attention, and analysts worry that ending extended benefits could disrupt what modest forward momentum the economy currently has.
“Federal unemployment benefits are one of the most effective stimuli we have,” said Christine L. Owens, the executive director of the National Employment Law Project.“Federal unemployment benefits are one of the most effective stimuli we have,” said Christine L. Owens, the executive director of the National Employment Law Project.
“The recovery is still fragile,” she said, “and to pull that amount of income and expenditure out of the economy — particularly at a time when people thinking about the holiday season — will have a significant impact on not just those individuals and their families but the economy as a whole.”“The recovery is still fragile,” she said, “and to pull that amount of income and expenditure out of the economy — particularly at a time when people thinking about the holiday season — will have a significant impact on not just those individuals and their families but the economy as a whole.”
Friday’s jobs report is unlikely to affect policy from the Federal Reserve, which has pledged open-ended stimulus until the job market improves “substantially.” Friday’s jobs report was unlikely to affect policy from the Federal Reserve, which has pledged open-ended stimulus until the job market improves “substantially.”
“This was not a perfect report by any means,” said Diane Swonk, chief economist for Mesirow Financial. “We would like to see double these kind of gains in jobs. Our benchmark on improvement is still pretty low.” “The Fed desires both a substantial and sustainable improvement in labor market conditions and is likely to read recent payroll growth as a positive step in the right direction, but just one step in a longer journey,” said Michael Gapen, director of United States research and global asset allocation at Barclays Capital.
The jobs snapshot for October was based on surveys conducted too early in the month to capture work disruptions across the East Coast caused by Hurricane Sandy. Economists expect that businesses and employment will resume their normal activity by the next jobs survey, in mid-November, and that some industries will likely show an increase in hiring precisely because of the storm.
“We had a lot of lost hours worked and production stuff still delayed, but much of that will be offsets by hiring of emergency workers, government workers and construction, to do all that emergency fixing,” said Ms. Swonk.