Job growth was solid but below economists’ expectations in October, while hourly wages rose more than they had in seven years and the unemployment rate ticked down a notch.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 142,000 nonfarm job gains in October. Local, state and federal governments gained 19,000 jobs, resulting in 161,000 total net job gains. Economists had expected between 173,000 and 175,000 total job gains, according to various sources.
The BLS revised job gains for August and September 2016, showing that the economy netted 44,000 more jobs than the BLS had previously estimated for the two months. After that revision, job gains have averaged 176,000 per month in the past three months. So far this year, job gains have averaged 181,000 per month. They averaged 229,000 per month in 2015.
Average hourly earnings for all private-sector employees increased by 10 cents to $25.92, after increasing by 8 cents in September. Average hourly earnings have risen by 2.8 percent in a year. For private-sector production and nonsupervisory employees, average hourly earnings increased by 4 cents to $21.72 in October, after increasing by 6 cents in September.
The unemployment rate ticked down from 5.0 to 4.9 percent in October, likely mostly due to holiday hiring.
The private sector has now gained nonfarm jobs for 80 consecutive months since the Great Recession, for a total of 15 million jobs. The unemployment rate has dropped 5.0 percentage points from the recessionary high of 10.0 set in October 2009.
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Job growth continued in professional and business services in October, this time by 43,000. This industry has added 542,000 jobs over the year.
At 31,000, job growth continued in health care as it has for years. (For example, the industry has added 415,000 jobs in the past 12 months, for a monthly average of 34,583.) Much of the industry’s steady job growth over the past few years is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in the Affordable Care Act (“Obamacare”) as well.
Manufacturing, one of the standard measures of labor-market health, lost 9,000 jobs. Construction, also a measure of labor-market health, gained 11,000 jobs. (See Table B by the BLS for more job numbers listed by industry.)
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (15.6 percent) followed by Blacks (8.6), Hispanics (5.7), adult men (4.6), adult women (4.3), Whites (4.3) and Asians (3.4, not seasonally adjusted). No group experienced a significant change in their unemployment rate except for Hispanics, who saw a decrease from 6.4 to 5.7 percent.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 2.6 percent unemployment rate in October, up slightly by 0.1 percentage point from September. Those in the same age group and who don’t have high school diplomas suffered a much higher 7.3 percent rate, but it was down significantly from 8.5 in September (likely due to holiday hiring). (See Table A-5 by the BLS for more information about the unemployment rate by education level.)
The unemployment rate has ranged from 4.7 to 5.0 percent so far this year, the lowest range since 2007. Economists consider an unemployment rate of around 5.0 percent to be normal.
In order for the BLS to count workers as unemployed, they must have been actively seeking jobs in the four weeks preceding the count. The number of workers that the BLS counted as unemployed in October was 7.8 million, down slightly from 7.9 million in September.
The count of unemployed workers does not include those who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers in October was 5.9 million, the same as in September.
The average workweek for all part-timers and full-timers in the private sector was 34.4 hours in October, unchanged from September.
The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there simply are no jobs — at least not for them.
The number of marginally-attached workers in October was 1.7 million, down slightly from 1.8 million in September. Among the marginally-attached, 487,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs. That was down from the 553,000 that the BLS reported in September. (The BLS does not seasonally adjust any of the figures in this paragraph.)
The number of long-term unemployed workers — those who have been without jobs for 27 weeks or longer — was 2.0 million in October, the same as in June through September. These workers accounted for 25.2 percent of the unemployed. Standard state unemployment benefits last only up to 26 weeks without extensions.
If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA.
For more details about the October 2016 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the November 2016 unemployment rate and job numbers on December 2. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.
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Except where otherwise noted, figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available).