Will this mean anything in the election? And an even better question: does it really mean anything in this economy?
Job creation laid an egg in October, with the lowest additions in almost four years -- and that was in the middle of the pandemic. According to the Bureau of Labor Statistics, the US economy added only 12,000 jobs last month -- but the unemployment rate held steady at 4.1%.
Total nonfarm payroll employment was essentially unchanged in October (+12,000), and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in health care and government. Temporary help services lost jobs. Employment declined in manufacturing due to strike activity.
Does the strike explain the low figure? Only to a point. Manufacturing took a big hit, but not that big of a hit, from Boeing and other strikes in October.
Manufacturing employment decreased by 46,000 in October, reflecting a decline of 44,000 in transportation equipment manufacturing that was largely due to strike activity.
Let's assume the strike never took place. We can add all 44,000 jobs back into the mix, and we'd still only have 56,000 jobs added in October, a level far below maintenance level in the American economy. It would still be the lowest number of 2024, at least, if not the last couple of years.
And that's hardly the only bad news on the job-creation front. Revisions of the previous two months have subtracted six figures from the reported job pool.
The change in total nonfarm payroll employment for August was revised down by 81,000, from +159,000 to +78,000, and the change for September was revised down by 31,000, from +254,000 to +223,000. With these revisions, employment in August and September combined is 112,000 lower than previously reported.
With all of those negatives, how did the U-3 unemployment rate remain steady? The denominators dropped, too. The civilian labor force declined by 220,000, while those not in the labor force spiked upward by 428,000. The actual number of employed persons in the Household survey declined by 368,000; the jobs-added figure comes from the Establishment survey.
You know what sector did really well, though?
Employment in government continued its upward trend in October (+40,000), similar to the average monthly gain of 43,000 over the prior 12 months. Over the month, employment continued to trend up in state government (+18,000).
What. A. Shock. Why would we be adding a half-million government jobs a year? Good question. Maybe it's to make sure we get positive results in bad months for reports from the BLS.
So what does this mean politically? It's not going to reflect well on Harris' stay-the-course message on Bidenomics. It's not just this report either; with the revisions in this report, we're barely averaging 100,000 jobs added per month, which isn't up to maintenance level in the economy. Going back six months in the chart provided by BLS, the job market looks consistently mediocre.
Economically, we'll have to wait and see. It might prompt the Fed to accelerate rate cuts to goose the jobs market again, and that could help boost the real-estate markets too. The economy seems to be flattening out again -- not approaching a recession but perhaps just longer-term stagnation. The upcoming holiday season should help the jobs market, although retail won't reverse this level of stagnation.
