Employment Level Falls by 43,000

The media is ballyhooing the October employment report as evidence of strong job growth and a strong labor market.  Don’t be fooled.

Sure, the headline numbers look good.  According to the establishment survey, the private sector added 142,000 jobs and unemployment fell to 4.9% (from 5.0% in September).  That’s good.  However, in the new normal where 100,000 is the new zero, it’s not great.

But look deeper.  The employment level – the number of people employed according to the household survey – actually fell by 43,000 in October.  The drop in unemployment?  That’s only due to a supposed decline of 195,000  workers in the labor force – the old “vanishing labor force” trick that the Obama administration has used often to mask the reality of a weak labor market.  In fact, with the population growing by 224,000 in October, the labor force grew by over 100,000.  Without that trick, unemployment actually rose by a tenth of a percent in October, and an honest measure of unemployment – one that grows the labor force along with the growth in population – has unemployment at 7.9%.

Regarding the employment level, it’s also worth noting that since February it has risen by 851,000.  That’s an average increase of 106,000 per month – barely keeping pace with growth in the population.  Consequently, there’s been no improvement in the historically high rate of 7.9% unemployment (the rate it would be if the labor force grew in proportion to the population).

It’s also worth noting that per capita employment – the employment level divided by the population – is exactly where it was in February.  No improvement.

October’s employment report is one more piece of evidence that the economy continues to stagger along in a zombie-like state.

Next up:  the September report on the trade deficit, also released this morning.

 

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