The October Employment Situation Report was released today. Payrolls declined by 190,000, after a 263,000 drop in September and a 216,000 drop in August (originally, it was revised in September’s report). Both preceding months were substantially revised: September to -219,000 and August to -154,000. So, according to the BLS revisions, October was worse than August. The unemployment rate moved from 9.8% to 10.2%. The Bloomberg consensus range for payrolls was -200,00 to -55,000, with the consensus coming in at -175,000. From the report:
The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarm payroll employment continued to decline (-190,000), the U.S. Bureau of Labor Statistics reported today. The largest job losses over the month were in construction, manufacturing, and retail trade.
In October, the number of unemployed persons increased by 558,000 to 15.7 million. The unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points.
Because of revisions, this is now above the three month average:
Total nonfarm payroll employment declined by 190,000 in October. In the most re- cent 3 months, job losses have averaged 188,000 per month, compared with losses averaging 357,000 during the prior 3 months. In contrast, losses averaged 645,000 per month from November 2008 to April 2009. Since December 2007, payroll employment has fallen by 7.3 million.
As indicated in the summary, construction, manufacturing, and retail trade have led the decline:
Construction employment decreased by 62,000 in October. Monthly job losses have averaged 67,000 during the most recent 6 months, compared with an average decline of 117,000 during the prior 6 months. October job losses were concentrated in nonresidential specialty trade contractors (-30,000) and in heavy construction (-14,000). Since December 2007, employment in construction has fallen by 1.6 million.
Manufacturing continued to shed jobs (-61,000) in October, with losses in both durable and nondurable goods production. Over the past 4 months, job losses in manufacturing have averaged 51,000 per month, compared with an average monthly loss of 161,000 from October 2008 through June 2009. Manufacturing employment has fallen by 2.1 million since December 2007.
Retail trade lost 40,000 jobs in October. Employment declines were concentrated in sporting goods, hobby, book, and music stores (-16,000) and in department stores (-11,000). Employment in transportation and warehousing decreased by 18,000 in October.
Health care (+29,000 in October, +597,000 since start of recession) and temporary help services (+34,000 in October, huge decline since start of recession) were both positives for this report.
This latter should probably be viewed as a double positive. Businesses want to get temp workers before committing to full hires as they crawl off the bottom. You might also see the average workweek firm (not necessarily, new part time workers in some jobs could offset the gains from moving people back to full time in others, but I peeked at the figures and needed a transition):
The average workweek for production and nonsupervisory workers on private nonfarm payrolls was unchanged at 33.0 hours in October. The manufacturing workweek rose by 0.1 hour to 40.0 hours, and factory overtime increased by 0.2 hour over the month.
This would also be positively interpreted.
Government jobs were unchanged, as gains in Federal employment were offset by losses at the local level (both moved by 16,000). State government employment was unchanged in October.
The best measure of underemployment has had an unfortunate rise. The U-6 number from Table A-12, the alternative measures of labor underutilization (BLS term). The number increased from 17% to 17.5%. The percentage increase was smaller last month.
There are some positive things in this report, but after the BLS revisions, it would be incorrect to call this month an improvement. The actual jobs lost was worse than in August and only a modest improvement over September. The unemployment rate (and U-6) rose faster than in September. The positive things are, however, consistent with business behavior after the end of a recession. This is consistent with GDP numbers and other economic indicators.
