The U.S. unemployment rate edged back up to 7.3 percent in October 2013, but the economy surprisingly gained a significant number of nonfarm jobs despite the government shutdown.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector gained 212,000 jobs while local, state and federal governments showed a net loss of 8,000.
Note: About 448,000 federal employees were temporarily furloughed (laid off) during the 16-day government shutdown in October. However, the BLS did not count them as unemployed because some worked anyway and all were to receive back pay.
Analysts had expected only 120,000-122,000 net job gains last month, due mostly to discouraged hiring because of the government shutdown. However, job gains in October turned out to be among the largest for the year, according to BLS preliminary statistics.
The BLS also revised its job numbers for August and September, showing that the economy gained 60,000 more jobs than previously reported. After the upward revision, the economy netted 401,000 jobs over the two months.
The private sector has now gained nonfarm jobs for 44 consecutive months, with total nonfarm employment (private sector plus government) showing net job gains in each of the last 37 of those months. The U.S. economy has netted an average of 190,000 nonfarm jobs per month over the past year.
At 53,000, the most notable October net job gains were in the leisure and hospitality industry. Within the industry, employment in food services and drinking places increased by 29,000 in October. The industry as a whole has averaged 29,000 monthly job gains over the past year.
Next in line was the retail trade industry by adding 44,000 jobs. The industry has averaged 31,000 monthly job gains over the past 12 months. Many of the October job gains that were above the 12-month average likely came from temporary holiday hiring.
The construction industry gained 11,000 jobs in October while manufacturing gained 19,000. Both of these major industries are key to analysts in gauging the overall health of the labor market.
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (22.2 percent) followed by blacks (13.1), Hispanics (9.1), adult men (7.0), adult women (6.4), whites (6.3) and Asians (5.2, not seasonally adjusted). No group experienced a significant change in its unemployment rate.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 3.8 percent unemployment rate in October, up slightly from 3.7 in September. Those in the same age group and who don’t have high school diplomas suffered a 10.9 percent rate, up from 10.3 in September.
Although the October unemployment rate of 7.3 percent still has a lot of room for improvement, it was significantly lower than the recessionary-high unemployment rate of 10.0 percent set four years ago in October 2009. (See the chart to your left.)
The unemployment rate has steadily held below 8.0 percent since September 2012, in a range of 7.2 to 7.9. Prior to September 2012, the unemployment rate ranged from 8.1 to 10.0 percent since February 2009. It was 7.8 and skyrocketing toward 10.0 when President Obama first took office in January 2009.
Prior to the most recent recession, economists considered the “normal” U.S. unemployment rate to be around 5 percent or between 4 and 6 percent.
The BLS counted 11.3 million workers as unemployed in October, unchanged from August and September. That count and the unemployment rate do not include workers 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 was 8.1 million in October, up from 7.9 million in September.
The average workweek for both part-timers and full-timers was virtually unchanged at 34.4 hours. Average hourly earnings rose by 2 cents to $24.10. Average hourly earnings have risen by 52 cents (2.2 percent) in the past year.
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 are no jobs.
The number of marginally-attached workers in October was 2.3 million (not seasonally adjusted), the same as in September. Among the marginally-attached, 815,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs — at least not for them. The number of discouraged workers was down from the 852,000 that the BLS initially reported in September.
The number of long-term unemployed workers, those who have been unemployed for 27 weeks or longer, was 4.1 million in October, the same number as in September. These workers accounted for 36.1 percent of the unemployed in October. Standard state unemployment benefits last only up to 26 weeks without extensions.
In January of this year, President Obama signed a law that stretches out eligibility for unemployment benefit extensions through 2013. The law does not, however, extend the 2011-2012 payroll tax cut through 2013.
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. To look for a new job, start at the Job Search page.
For more details about the October 2013 unemployment rate and related matters, see the “Employment Situation Summary” by the BLS. The BLS plans to report the November 2013 unemployment rate on December 6. To receive notification like this automatically, subscribe to Employee Rights Blog for free.
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Certain 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). The unemployment rate chart pictured above was provided by the BLS.