Small Business Election Countdown: The October Jobs Report

By SBE Council at 4 November, 2016, 10:05 am

Heading into next week’s presidential election, the October jobs report turned out to be underwhelming.

In terms of the establishment (or payroll) survey, jobs increased by a far-less-than-robust 161,000 in October. To put that in perspective, strong monthly job growth would be running in the 250,000 range. It also should be noted that payroll growth has been steadily declining since June.

Meanwhile, the household survey – which is more volatile but also better captures startup and small business activity – took a big step back in October. The labor force declined by 195,000, with the labor force participation rate inching down from 62.9 percent to 62.8 percent. Employment fell by 43,000, with the employment-population ratio falling slightly from 59.8 percent to 59.7 percent. Overall, those not in the labor force increased by 425,000, which allowed the unemployment rate to actually inch down from 5.0 percent to 4.9 percent.

This report continues to point to the longer-run problems we have faced on the jobs front, which was laid out in SBE Council’s recent Gap Analysis #6: America’s Lost Jobs. In that report, it was explained that the U.S. economy labors under a labor force participation rate and an employment-population ratio that linger near multi-decade lows. The result? The U.S. economy is down by more than 8 million jobs compared to where we would be under a reasonable employment-population ratio.

This lack of jobs, of course, ties back to sluggish private investment (see SBE Council’s Gap Analysis #2: A Lost Decade for Private Investment), and declining levels of entrepreneurship (see SBE Council’s Gap Analysis #3 – Entrepreneurship in Decline: Millions of Missing Businesses).

That is why it is critical during the remaining days of the campaign season that candidates focus on their specific policy agenda to reignite investment, entrepreneurship and quality job creation.

To view the positions of the presidential candidates on a range of issues important to small business and the health of the U.S. economy, visit SBE Council’s profile pages here:

Hillary Clinton

Donald Trump

Raymond J. Keating, Chief Economist