« What do you want first-the good news or the bad news? (Bureau of Labor Statistics edition) | Main | Vanilla Coke to be phased out in the U.S. »
November 4, 2005
Job growth slows in October
According to the BLS, the economy added a net 56,000 jobs in October, well below the level needed to keep up with population growth. This only adds to the building puzzle over why job growth has been sluggish even as real GDP posts 10 consecutive quarters over 3%.
I'll add a graph later, but I'm trying to do about three things at once and wanted to get this story up with a couple of links right away.
See the NY Times story here. They note that:
The department revised its figures for August and September. It said that 148,000 jobs were created in August instead of 211,000 that it previously thought and that 8,000 jobs were lost in September instead of 35,000. As a result, the data shows 36,000 fewer jobs were created over the two months than the department previously estimated.
Kash (Angry Bear) notes that construction job growth has been strong while all other sectors have really fallen off in the last three months.
The household survey continues to show a different picture than the establishment survey. The unemployment rate fell to 5.0% and the labor force participation rate and employment to population ratios have been basically steady for the last three months or so.
The annual revisions in a few months might be interesting. Stay tuned.
UPDATE: PGL leaves a comment and has a post at Angry Bear
UPDATE 2: Here's the graph I've been meaning to make. It's not a pretty picture.
As Barry Ritholtz said today in a post entitled "Ignore the noise," meaning the noisy monthly payroll data.
...Considering that much of the noise comes from professional economists – who should know better – I find this to be disappointing.
...
The monthly jobs data is too noisy to focus on any one single point; That’s even more true post Katrina/Rita/Wilma. So why concoct all this happy talk?
And Ritholtz certainly doesn't want to focus on the household survey either. (I don't either--but I'm going to be interested in how the annual revisions shape up.)
Anyway, this graph eliminates some of the noise. Look at how the current downturn (the last three months have averaged about 65,000 jobs per month) in job growth looks similar to the drop in 1995, but the post-recession peak this time around was lower than in 1994. That observation is not discernable from the noisy monthly data.
Posted by William Polley at November 4, 2005 11:39 AM
Trackback Pings
TrackBack URL for this entry:
http://www.williampolley.com/cgi-bin/mt-tb.cgi/419
Listed below are links to weblogs that reference Job growth slows in October:
» Latest employment statistics: the clear thing is that it's not at all clear from Econbrowser
Last week's GDP statistics and this week's
[Read More]Tracked on November 6, 2005 2:33 PM
Comments
As the other Angrybear (me) noted, the labor force participation rate dipped just a bit. It is true that the employment-population ratio went back to 62.9% as the household survey showed a different picture of employment growth than the payroll survey. Noise in the labor market statistics!
Posted by: pgl at November 4, 2005 1:14 PM
The y/y change in the survey is 2.0% and in the payroll it is 1.5%. The 2.0% gain in the survey is near the peak for this cycle. A 50 point spread between the two growth rates is not at all unusual. Moreover, the survey data tends to lead the payroll data so having stronger survey data may actually be a bullish sign.
Moreover, the hours worked data still seems to be OK, and wage growth is improving.
Posted by: spencer at November 5, 2005 8:26 AM