Employment Report: 171,000 Jobs Added in Oct.; Unemployment Up Slightly to 7.9%

November 2, 2012 03:11 AM

via a special arrangement with Informa Economics, Inc.

Last broad snapshot of the economy before the Nov. 6 election

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The U.S. economy added 171,000 jobs in October and the unemployment rate ticked higher, rising to 7.9 percent, according to the U.S. Labor Department.

The private sector drove the increases this month, with 184,000 jobs added while the state and federal government payrolls declined 13,000, according to the report, with nearly every sector adding jobs on the private side of the ledger.

There were also significant revisions to prior reports -- September payrolls were revised to a gain of 148,000 from an initially reported 114,000, and August to 192,000 from 142,000.

As for the unemployment rate moving higher, there was a 170,000 rise in the number of jobless while the number employed rose another 410,000. That comes after a huge increase of 873,000 on September. The number of those not counted as being in the workforce declined 369,000 in October. "The civilian labor force increased by 578,000 to 155.6 million in October, and the labor force participation rate edged up to 63.8 percent," according to the report. "Total employment rose by 410,000 over the month. The employment-population ratio was essentially unchanged at 58.8 percent, following an increase of 0.4 percentage point in September."

As expected, Hurricane Sandy was a non-event for the report: "Hurricane Sandy had no discernible effect on the employment and unemployment data for October. Household survey data collection was completed before the storm, and establishment survey data collection rates were within normal ranges nationally and for the affected areas."

In October, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.0 million. These individuals accounted for 40.6 percent of the unemployed.

Other highlights of the report:

Employment growth has averaged 157,000 per month thus far in 2012, about the same as the average monthly gain of 153,000 in 2011.

Average workweek was 34.4 hours, unchanged for the fourth consecutive month.

Average hourly earnings for all employees declined 1 cent to $23.58. Over the past 12 months, average hourly earnings have risen by 1.6 percent.

Comments: The report came in above expectations in terms of jobs added which has provided support to U.S. stock futures ahead of the opening bell. Of concern in the data is the earnings figures as the 1.6 percent increase in average hourly earnings over the past year compares to inflation running at 2 percent so wages are not keeping up with the pace of inflation thus far. And, the issue of Hurricane Sandy will be watched in the November data which is due out Dec. 7. The data also does not improve the jobs picture enough to warrant any shift by the Federal Open Market Committee (FOMC) away from their current accommodative policy.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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