U.S. added jobs in October, first time since May

U.S. economy added 151,000 jobs in October, a welcome change after four months of job losses but still not enough to make a dent in unemployment.

Private companies have been expanding their payrolls throughout 2010, according to a Labor Department report released Friday. Private job growth had been overwhelmed by the elimination of temporary decennial Census jobs and layoffs by state and local government during the summer and early fall — until October.

Companies added 159,000 jobs last month, after a gain of 107,000 jobs in September. Governments cut 8,000 jobs following losses of 148,000 positions in September. October was much stronger than expected — most forecasts were for a gain of 60,000 jobs.

The report also revised the numbers for August and September. The August data was revised to reflect a loss of 1,000 jobs instead of 57,000, and September was revised to 41,000 losses instead of 95,000.

“The big picture from this report and some of the others recently all points to a pickup in growth in the beginning of the fourth quarter,” said John Ryding, chief economist at RDQ Economics. “The notion that economy might be double-dipping can now be safely tossed out.”

Still, the economy has a long way to go before the world brightens for many Americans. Nearly 15 million people are out of work and actively looking, and the unemployment rate, which remained steady at 9.6 percent, has been relatively flat since May.

A broader measure of unemployment, which includes people who are working part-time because they cannot find full-time jobs and people who have given up looking for work, ticked down slightly to 17 percent from 17.1 percent in September.

The economy last added jobs in May, when more than 400,000 workers were hired by the federal government to help with the Census.

In the absence of congressional action, the last tier of unemployment benefits is also set to expire soon. With little prospect of employment in the near future, many of the nation’s long-term unemployed, whose numbers hover around record highs, have become increasingly desperate.

“I hope that Congress can become human and forget about being Democrats or Republicans and just be human beings to see what it’s like for us,” said Annette Tornberg, 50, of Sacramento. Tornberg was laid off from her job at a printing company in 2009 and has been unable to find work. “We’re human beings, and all we want is for you to help us out.”

(source:sltrib.com)

Dark Side of Jobs Report,Broader U-6 Rate at 17%: The Long-Term Unemployed

U.S. jobless rate was flat at 9.6% in October, but the government’s broader measure of unemployment dropped slightly to 17%, possibly due to long-term unemployed dropping out of the labor force.

The comprehensive gauge of labor underutilization, known as the “U-6″ for its data classification by the Labor Department, accounts for people who have stopped looking for work or who can’t find full-time jobs.

The key to the decrease in the broader unemployment rate was due to a 318,000 drop in the number of people employed part time but who would prefer full-time work. That drop reversed part of last month’s big 612,000 jump. Meanwhile, the number of discouraged workers and those who classify themselves as “marginally attached” to the labor force also increased.

The broader rate decreased despite a decline of 330,000 in the number of people who are employed. That drop may sound strange considering the Labor Department reported the economy added 151,000 jobs in October. It’s important to remember that the unemployment rate and jobs numbers are calculated using separate surveys, and the often move in differing directions. The household survey, which is used to calculate the unemployment rate, also is much more volatile, covering a substantially smaller percentage of the work force. And some of this month’s weakness may be the result of earlier strength that stood in opposition to declines seen in payroll data.

Though the number of employed dropped substantially, the number of people unemployed only increased by 76,000 and the number of people in the total labor force declined. That kept the unemployment rate steady.

The 9.6% unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things. The rate is calculated by dividing that number by the total number of people in the labor force.

The drop in the size of the labor force is likely an indication that many discouraged workers are just giving up. The labor force is only about 50,000 higher than it was in October 2009, but the population of working-age Americans who aren’t in the military or an institution, such as a prison or home for the aged, has increased by nearly two million people over that time.

The U-6 figure includes everyone in the official rate plus “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that’s all they could find. People who drop out of the labor force completely aren’t included in this tally.

Further supporting the contention that people are dropping out of the labor force is the continued increase in the number of long-term unemployed. Following an 83,000 increase in October, more than 6.2 million Americans have been out of work for 27 weeks or longer. Anyone unemployed over 99 weeks has no access to unemployment benefits and many lose access even earlier. Once those benefits expire, the unemployed may stop considering themselves part of the labor force.

UPDATE: Ray Stone of Stone & McCarthy Research notes an important point about the October data that effects the shrinking size of the labor force. “The biggest source of decline in the October Labor force was due to workers who were employed in September exiting the Labor Force in October,” he writes. “Based on the participation rate data it would seem to be mature workers (age 45+) who have elected to either retire, or buy into early retirement packages.”

That doesn’t change the fact that the number of long-term unemployed remains at an extremely elevated level, and many may still be dropping out of the labor force. But it suggests that this month’s drop was due more to recently employed older workers leaving their jobs.

(source:blogs.wsj.com/)

Jobs Data Highlight the Challenges for Washington

As President Obama said himself, that was the message in Friday’s Labor Department report, which showed that the United States economy added 151,000 jobs in October.

It was certainly a welcome change after four months of job losses but not strong enough to make a dent in unemployment. Nearly 15 million people are still out of work, and the unemployment rate remains at 9.6 percent.

The jobless rate has not fallen substantially this year largely because job growth has been barely fast enough to absorb new entrants to the labor force. And even if the economy suddenly ramps up and starts adding 208,000 jobs a month — the average during the best year of job creation this decade — it would take 12 years to fully close the gap between the growing number of American workers and the total number of jobs available, according to Brookings Institution’s Hamilton Project.

The latest numbers underscore the challenges that lie ahead for Washington in the wake of a newly divided government and calls by Republican leadership to discredit President Obama’s economic policies. Economists themselves cannot agree about what kinds of policy measures would rescue the job market. And even if a magic bullet were available, it seems unlikely that a gridlocked Congress could cooperate long enough to put it in place.

The policy measures that are more feasible — in particular, the Federal Reserve’s decision this week to pump more money into the economy — seem to be upsetting the rest of world. The lead-up to the Group of 20 summit meeting in South Korea next week has been dominated by criticisms of the Fed’s announcement and battle cries over “currency wars.”

Given all this, President Obama has tried to recast his Asia trip as a jobs mission.

“The primary purpose is to take a bunch of U.S. companies and open up markets so that we can sell in Asia, in some of the fastest-growing markets in the world, and we can create jobs here in the United States of America,” Mr. Obama told his cabinet Thursday. On Friday he tried to highlight the bright spots in the jobs report, calling it “encouraging.” Still he acknowledged, “The fact is, an encouraging jobs report doesn’t make a difference if you’re still one of the millions of people who are looking for work.”

He reached out to Republicans who have just won control of the House and picked up six seats in the Senate, pledging to work together on job growth. “I am open to any idea, any proposal, any way we can get the economy growing faster so that people who need work can find it faster,” he said, ticking off ideas like more infrastructure spending and tax breaks for businesses.

(source:nytimes.com)