Perspective is a wonderful thing and is probably the characteristic most responsible for the reasoning we humans claim to have. Let’s, for the sake of this report, concede that we do, indeed, serve ourselves well – this month, for sure, by our perspective. Case in point, October’s Job Report from the Bureau of Labor Statistics.
Following spectacular months is a tough task when you’re still good.
So, October’s Jobs Report wasn’t so great. It also wasn’t so bad. But when expectations are high, there’s some explaining to do. Here it is.
150,000 jobs created
To keep up with population growth, our economy needs to create in the neighborhood of 120,000 jobs monthly. We’re averaging 233,000 so far in 2023, 205,000 over the past six months. Before the pandemic, those were sought after numbers; today, well, we’ve been spoiled: 11 million jobs in the first two years of the Biden administration – a 460,000 monthly average – greatest performance since BLS started tallying in 1939. Take away the sizzle and there’s still a formidable steak. Further, after 30 consecutive months of unprecedented growth, some kind of normality must return.
From the individual’s perspective: The micro-view
The unemployment rate ticked up by 0.1% to 3.9%. Is that meaningful? Not by itself, for three reasons: (1) It’s a microscopic change, hardly detectable in the Richter Scale; (2) 3.9% is still a remarkably low, enviably low number, and (3) It was caused by a hefty number of new entrants and re-entrants into the job market, who haven’t yet landed but are, nevertheless, part of the numerator in this formula. So for the individual, it’s troublesome. But these spikes in job candidates are usually followed, a month or two later, by landings. Things even out. There is nothing to worry about here.
Industries with significant job growth: The macro-view
In October, health care added 58,000 jobs; government increased by 51,000; social assistance added 19,000; construction employment continued its upward trend, adding 23,000; leisure and hospitality grew by 19,000, slower than in the previous 34 months but satisfactory in how it continues the bounce back; professional and business services was little changed but up 15,000, nonetheless.
Industries with little change in employment
Over the month, employment showed little change in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; financial activities; and other services.
Industries with job losses, although mostly small
Employment in manufacturing decreased by 35,000, almost all of it – 33,000 in motor vehicles and parts that was largely due to strike activity. Employment in transportation and warehousing was little changed but down by 12,000, most likely related to the drop-off in movement of automobiles and parts, while warehousing and storage lost 11,000 jobs.
All in all, not bad numbers
Taken as a big picture, it’s not bad: strong numbers posted by the gainers and small numbers suffered by the losers.
Wages still climbing
And, finally, while more people are working, people are earning more. Average hourly earnings for all employees on private nonfarm payrolls rose by 0.2 percent, to $34.00. Over the past 12 months, average hourly earnings have increased by 4.1 percent, significantly outpacing inflation.
The sum and substance
More people are working, they’re making more than ever before, and they’re beating inflation and having more savings and spending power to show for it. It continues to be a powerful job market, despite the unspectacular surface number.
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