The economy added 80,000 jobs and unemployment ticked down to 9 percent in October, according to figures released by the Labor Department today.
The October report marks a continuation the nation's recent trend of steady but sluggish job growth, and within the data, several other trends also continue, such as the service sector carrying the economy. The private sector added 104,000 jobs in October, while the public sector shed 24,000. Within the private sector, goods-producing industries lost 10,000 jobs, while service-providing industries added 114,000 jobs.
The addition of 80,000 jobs represents a slight disappointment; some analysts had predicted 100,000 new jobs or more. However, the report shows that jobs increased by more than previously reported in recent months, with August and September's figures now revised upward by a combined total of 102,000 jobs. Those workers are also now earning slightly more, with average hourly earnings ticking upward for the second straight month.
For these reasons, the October employment report is not the disappointment it might appear on first blush, says Brad Sorensen, director of market and sector analysis at Charles Schwab. "I think you could characterize it as a little better than expected, overall, because the headline number was a little bit disappointing. but with [August and September job growth] revisions and [an increase in] average hourly earnings as well, and with the unemployment rate dropping...it was certainly not a robust report, but a decent report." he says.
Indeed, the data shows that the situation improved in October in ways that the headline unemployment rate does not capture. The U-6 measure of unemployment, which includes people employed part-time for economic reasons and marginally attached workers, dropped to 16.2 percent from September's 16.5 percent. And after increasing for two months, the number of people employed part-time for economic reasons decreased by 374,000 to just under 8.9 million, potentially meaning an end to that upward trend. In addition, the mean duration of unemployment dropped to 39.4 weeks in October from 40.5 weeks in September. This is its lowest reading since April, but remains an unnerving figure; in 2006, when the economy experienced robust growth, the mean duration of unemployment hovered around 16 and 17 weeks.
Whatever encouragement might be found deep in the Labor Department's data, there is no question that getting the unemployment rate down to pre-recession levels, particularly at a time of anemic economic growth, will be a long and difficult slog.
"Growth in the range of 4 to 5 percent is needed to get unemployment down to 6 percent over the next several years. In 2011, the economy has been growing at about 2 percent, and that pace is expected to continue through next year," wrote Peter Morici, professor of the Smith School of Business at the University of Maryland,in a commentary on today's job figures.
Outlook for that GDP growth seems to grow steadily weaker. This week, the Federal Reserve reduced its GDP growth outlook for 2012 and 2013, now predicting that the U.S. economy will likely grow at a maximum of 3.5 percent in 2013, down from a June projection of 4.2.