October Jobs Analysis: Lower than Expectations

By at 3 November, 2017, 12:16 pm

But Level of Entrepreneurship Improves

by Raymond J. Keating-

The jobs picture for October by the latest employment report from the U.S. Bureau of Labor Statistics was far from bright.

Disappointment from Payroll Survey

There were wide expectations for a strong snapback in the establishment, or payroll, survey after the September numbers had been hit hard by Hurricanes Irma and Harvey. However, the payroll survey pointed to a gain of 261,000 in October. In a normal month, that would be solid, but it indicated some weakness after September’s meager, hurricane-impacted gain of 18,000.

Poor Data from Household Survey

Meanwhile, the other part of the employment report is the household survey, which provides the data from which we get the unemployment rate and tends to better capture start up and small business activity. The household survey also tends to more volatile than the establishment survey.

Unfortunately, after a good household survey report in September (see SBE Council’s analysis), October’s turned sharply down. Key points from the October household survey were:

-The labor force declined by 765,000, and the labor force participation rate declined from 63.1 percent in September to 62.7 percent in October.

-Employment declined by 484,000, with the employment-population ratio falling from 60.4 percent in September to 60.2 percent in October.

-The number of unemployed actually declined by 281,000, with the unemployment rate declining from 4.2 percent to 4.1 percent, but that was due to people leaving the labor force, not because of job gains.

Good News on Recovering Entrepreneurship

However, there were positive developments from the household survey, and that was on the entrepreneurship front. The household survey provides two measures of entrepreneurship – unincorporated self-employed and incorporated self-employed.

The unincorporated self-employed data is seasonally adjusted, so we can look at the numbers from month to month. The October level came in at 9.7 million, which was the third straight month of gains, and was up versus 9.549 million a year earlier.

Meanwhile, the incorporated self-employed is not seasonally adjusted, so we have to compare the October data to the same time last year. The October 2017 level of 6.171 million was up notably from the October 2016 level of 5.704 million.

If a period of recovery and expansion were to take hold on the entrepreneurship front, that would be good news for innovation, and economic, income and employment growth in the near term and over the long haul. In order for that to happen, current efforts on the tax and regulatory fronts must be successful, permanent and robust, as the clearest impediments to small business creation, growth and investment over the past decade have been increased costs and uncertainties from federal policymaking.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.


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