This morning’s employment report (link provided above) was a mixed bag of bad news and good news which, taken together, only provide further verification of an economy stuck in a “New Normal” mode of high unemployment.
The bad news is that the BLS’s (Bureau of Labor Statistics) “establishment survey” shows that only 80,000 jobs were added in October, well below the pace of 125,000 needed to keep pace with growth in the labor foce.
The good news is that the unemployment rate, determined by the BLS’s “household survey,” fell from 9.1% to 9.0%. The reason that it fell is more good news – the employment level rose by 277,000 (the 3rd consecutive monthly increase) – a rate that would have reduced unemployment even more if the BLS didn’t claim that the civilian labor force grew by 181,000. In other words, it used the opportunity to reduce the pool of workers that it claims had given up looking for work.
Here’s the chart of the work force and employment level:
As you can see, employment level has been slowly rising, but no faster than the real growth in the labor force. The net result is that the number of unemployed Americans has been holding pretty steady and per capita employment remains stuck at recession lows:
And here’s my monthly update of the BLS data and my calculation of unemployment, along with the chart:
This economy is headed nowhere, in spite of being propped up with trillions of dollars of stimulus in the past three years, all of which is coming to an end with big federal budget cuts (sure to be followed by more state and local budget cuts) on the horizon. While some analysts see the potential for a double-dip recession fading, I see it as virtually a sure thing.
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Here’s a breakdown of the 80,000 new jobs reported in the establishment survey:
professional & business services: + 32,000
leisure & hospitality: + 22,000
retail trade: + 16,000
health care: + 12,000
mining: + 6,000
manufacturing: + 5,000
construction: – 20,000
government: – 24,000
Manufacturing employment, where the Obama administration has pinned its hopes for reviving the economy, has been flat for 3 months.