October Jobs Report: Pretty Solid

By at 1 November, 2019, 12:12 pm

by Raymond J. Keating-

The October jobs report from the U.S. Bureau of Labor Statistics, once you get beyond the headlines to the more substantive numbers, turned out to be pretty solid.

The headlines were underwhelming, with payroll gains of 128,000 for October, and increases coming in below 200,000 in seven of the last nine months. For good measure, the unemployment rate inched up in October to 3.5 percent to 3.6 percent.

But the numbers that offer a more substantive look at the employment picture – i.e., key data from the household survey – show positives for the month.

First, the labor force increased by 325,000, moving the labor force participation rate up to 63.3 percent. Though still short of the pre-recession levels (when it topped 66 percent), the 63.3 percent labor force participation rate was the highest since August 2013.

Second, employment increased by 241,000, leaving the employment-population ratio at 61.0 percent. The 61.0 percent employment ratio registered in both September and October 2019 was the highest rate since December 2008 (though, once again, prior to the recession it had topped 63 percent).

So, considering the important measures, the jobs story for October was a plus.

Looking more broadly, the U.S. economy is in a strange spot when it comes to employment. Business are experiencing a tight labor market in terms of finding people to fill positions. A significant number of people are still not participating in the labor force, that is, they neither hold a job nor are they seeking one.

Finally, the recent slowdown in GDP growth and decline in business investment generate questions about future job creation. So, some glaring job market inconsistencies exist. Needed policy clarification – in a positive direction – would aid small businesses, and boost investment. That means the pursuit of a unified pro-growth policy agenda in terms of taxes, regulations, trade, immigration, government spending, and monetary policy.

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


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