October Jobs Up 80,000
“We’re doing O.K., even if we’re not doing great. The odds of a double-dip recession are lower, at least.” This is the reaction of Augustine Faucher, Director of Macroeconomics at Moody’s Analytics on the 80,000 job positions filled in October according to The New York Times. This figure is far from the rosy picture painted by President Obama in January 2009 when he urged Congress to pass the stimulus package bill.
Could have been worse.
That was the reaction on Friday to the government report that the nation’s employers added just 80,000 jobs in October. While the pace was not exactly robust, it was better than over this summer, when monthly hiring fell to 20,000. Upward revisions in the report for September and August gains contributed to the sense that the economic picture was a little less bleak.
“The underlying momentum of the economy is better now than we thought it was a few months ago,” said Augustine Faucher, the director of macroeconomics at Moody’s Analytics. “We’re doing O.K., even if we’re not doing great. The odds of a double-dip recession are lower, at least.”
But even without a second recession, frustration over the sluggish recovery could impede President Obama’s re-election chances.
The administration is still haunted by its overly optimistic predictions, made in January 2009, of what the economy would look like once Congress passed a $787 billion stimulus package. White House economics advisers predicted that the stimulus would bring unemployment down to 6 percent by the end of this year and close to 5 percent by the end of 2012. Instead, unemployment dipped slightly to 9 percent in October from 9.1 percent, about where it has been all year long. The Federal Reserve is projecting about 8.6 percent for next year.
“What I take from this report is that the economy is moving in the right direction, but it’s not moving there fast enough, and this is why the administration proposed the American Jobs Act,” said Alan B. Krueger, chairman of the Council of Economic Advisers.
The job gains in October were just barely enough to keep up with population growth, so they did not substantially reduce the backlog of 14 million unemployed workers. As a result, the unemployment rate is still about double what it was in the year before the recession began, 4.6 percent.
Among the biggest challenges is the army of millions of Americans who have been out of work for months or even years.
The average time an unemployed worker has been pounding the pavement is unusually high, at 39.4 weeks, just shy of the all-time high of 40.5 weeks recorded in September. People who have been out of work for longer spells have significantly more trouble getting rehired, for complicated reasons, including stigma and the deterioration of skills.
“In interviews, they say they’re concerned that my base of skills has been antiquated because of this employment gap,” said Sarah Hoppe, 43, a former account manager in Toledo, Ohio, who was laid off in July 2009.
“I tell them I have a good mind and an infinite capacity to learn,” she said, but employers still pass her over. “It’s absolutely demoralizing.”
In addition to the upward revisions to previous job growth numbers, there were a few other positive signs in the latest jobs report.
Employment in temporary help services rose slightly. Employers often use temp workers before taking the plunge and hiring permanent staff.
Hourly earnings also rose 5 cents, after a gain of 6 cents in September.
The length of the average workweek, however, remained flat at 34.3 hours, where it has been for about a year. Companies usually work their existing employees harder before hiring additional workers, so the stagnant workweek is not a particularly good sign for job growth.
Photo by totalAldo