The unemployment rate is down to 10%. Payroll employment, a more reliable month-to-month indicator, was “essentially unchanged.” That’s Bureau of Labor Statistics lingo for 11,000 fewer jobs than the month before. So the number is still negative, but after 21 straight months of 100,000+ job losses, it’s pretty encouraging news.
Now for the usual caveats. These numbers are subject to revision. Last month’s payroll job loss number of -190,000 has been revised down to -111,000. September’s nasty -263,000, which had me wondering if the job market had started getting worse again, has been revised down to -139,000. So this month’s good news could be revised upward into really good news or downward into disappointment. The trend is looking pretty good but, as Ian Shepherdson of High Frequency Economics writes, “There is no doubt the underlying trend in payrolls is improving, but this looks a bit too fast.”
The unemployment rate doesn’t get revised but tends to jump around a lot (it’s based on a Census Bureau random sample of 60,000 households, while the payroll number is based on a more exhaustive survey of 150,000 employers that takes longer to complete). The fact that it’s down from 10.2% to 10%, while it sounds nice, doesn’t mean a whole lot. U-6 unemployment, a broader measure that takes into account discouraged workers and involuntary part-timers, is down from 17.5% to 17.2%. Again, better down than up, but still awfully high.
Update: One bit of really negative news in the report was that, as the BLS reported:
The number of long-term unemployed (those jobless for 27 weeks and over) rose by 293,000 to 5.9 million. The percentage of unemployed persons jobless for 27 weeks or more increased by 2.7 percentage points to 38.3 percent.
Basically, while businesses have significantly slowed the paced of firing, they’re not doing a lot of hiring. And 27 weeks ago, back in May, jobs were still disappearing at a 300,000+ per month pace. So a bunch of those May job losses just showed up in the long-term unemployment number for the first time. It doesn’t negate the picture of an overall improvement in the trend. It just means things are still really tough out there.