Justin Lahart reports at the Wall Street Journal:
Job growth slowed sharply last month, with workers sidelined by hurricane effects and the continuing Boeing strike.
The Labor Department on Friday reported that the economy added a seasonally adjusted 12,000 jobs in October, versus a September gain of 223,000. Economists polled by The Wall Street Journal, anticipating storm and strike effects, expected a gain of 100,000.
Still, the unemployment rate stayed steady at 4.1%, in line with economists’ expectations.
Note that even the expected 100,000 gain was far below the replacement level.
If this were 20 years ago, that would be “October surprise” level scandal. With an election period of several months, many of the votes already having been cast, the impact is certainly much lower than it might have been. Still, it’s not nothing. It is likely to have an adverse effect on Vice President Harris’s election prospects.
Worse still is that the only remedial action that might be taken will add to inflation. Since inflation is a lagging indicator, it will take a while for it to materialize but fasten your seatbelts.
Meh. I rarely think that 1 month means much and we make too much of one month numbers. It could say something about the general economy or maybe just that the hurricane effects were larger than expected.
Steve
That’s the headline.
Underneath it was worse. Revisions in the establishment survey were negative, so August as originally reported was 142K, revised down to 78K. September from 253K to 223K. The household survey has employment was down 368K from last month.
It was a fluke of rounding unemployment didn’t go up, if you looked at 2 decimals, it went from 4.05 to 4.14.
More ominously, the household survey shows the number of employed has gone up by 200K in the past year while the number of unemployed has increased by 500K. Since its year over year, its not effected by seasonal factors.
All while inflation is still smoldering…..
Although I take Steve’s point estimate comment at face value, I would suggest he read Curious’ comment. Or the FRED data.
This game of reporting good numbers, and then later revising down the numbers after the lights are turned off is a media phenomena. Jobs growth stinks. The unemployment rate is a byproduct of a workforce that doesn’t show up, or takes low wage/2 jobs status. Real wage growth stinks.
It’s not a good economy. Spin your asses off, Steve’s of the world. It’s not a good economy. Biden/Harris has been awful. And people know it.
Drew, thanks for solving our problems with deep insight and understanding, I’ll rest easier now.
Just to amplify, the long term trend in job numbers has been down. This is an outlier off trend so I think it’s most likely due to stuff like the strike and hurricane. However, the economy has been running too hot which is why we raised rates so high and it looks like the increase in rates is doing what we expected. Now we need to see the GDP numbers as GDP has been increasing faster than expected. At any rate, it looks like we can expect another rate cut. A recession has been predicted for the last 2 years. There had been hopes for a soft landing but my best guess would be that the Fed has been too slow in cutting rates so we do end up in recession.
I still dont get this weirdness about revising the job numbers. We dont really have a way to directly count jobs so we use a combination of methods knowing that the initial numbers will be revised, multiple times.
Steve
“I still dont get this weirdness about revising the job numbers. We dont really have a way to directly count jobs so we use a combination of methods knowing that the initial numbers will be revised, multiple times.”
Seriously? It’s been overwhelmingly one way. Publish a number with fanfare. Revise downward later after the lights have been turned off. The trend is clear. And to throw gas on the fire, much of the job growth has been low wage and part time. And government workers.
I’m not sure, but I think even Larry can figure this out. At least he doesn’t go by Curly.
If there really was a conspiracy why not just announce the revisions as also going up? Why did they do the same thing for 3 of the years when Trump was in office and why did they undercount in 22? Why were the up vs down years the same number for Obama? There is no evidence of a conspiracy. Just for once it would be nice to see some actual evidence for a conspiracy along with the claim.
Steve
and sectors in which the majority of revenue comes from government at one level or another.
Above I used yearly numbers but realized for a true apples to apples comparison I should use monthly numbers. 15 out of 16 last months were revised down. 17 out of the previous 19 months were revised up. So, it could be that the people running the conspiracy just take turns making the numbers go up or down, but it’s much more likely based upon how they calculate their numbers. No true conservative would ever look at that but it’s basically 2 survey numbers and unemployment insurance claims from the states, and the initial job numbers come from one survey, the CES. What you see with this method which doesnt actually count job numbers is that when numbers are steadily trending up the undercount and when steadily trending down they overcount so the revisions are almost always in one direction.
On the part time jobs thing it is covered at the link. If you look at part time numbers they are currently increasing but they are lower than they were much of the Trump presidency and in line with numbers during the Bush era. If I get time will loo at the claims about jobs being added being low paying. Since you guys operate exclusively on feelings and not data I suspect it wont be quite what you claim. I suspect it’s a long term problem.
Query- Is there a reason that people note 15 out of 16 but are able to ignore 17 out of 19 in the preceding years. Is the percentage really that much larger?
https://www.advisorperspectives.com/dshort/updates/2024/10/10/a-closer-look-at-full-time-and-part-time-employment
Steve
Debt overhang makes real growth harder. We maintained a pretty flat debt-to-GDP ratio for nearly 20 years. It has increased sharply both under Trump and Biden.
I opposed Trump’s cuts in the personal income tax rates and Biden’s increased spending for just that reason.
At this point nearly anything we do will increase inflation. The least painful way of coping with that would be increase primary and secondary production but that, too, would be painful. What is most likely is decreasing growth with increasing inflation (stagflation).
In case anybody brings it up I opposed Bush II’s tax cuts and Reagan’s tax cuts, too.
Just to nitpick. The BLS (https://www.bls.gov/web/empsit/cesnaicsrev.htm) keeps track of the monthly revisions.
I don’t see 15 out of 16 underestimates preceded 17 out 19 out performances.
What I do see is pre-COVID, the revisions were minimal (and generally in no clear direction). Since COVID, the revisions are a magnitude larger, at least 5x the size pre-COVID. In 2020, the revisions were significantly negative. In 2021, the revisions were significantly positive. In 2022, the revisions were neutral on average. In 2023, 2024, the revisions were very negative.
It accords with the “vibe” of the labor market, 2020 was pretty bad during the pandemic, 2021 was great as the economy reopened, 2022 was blah as inflation skyrocketed and the fed tightened, 2023 felt pretty hard to get jobs and its continued to get worse through 2024.
My most significant concern is the report is overstating the health of the labor market — we know this because they revised even the revised 2023 job numbers down by a 1 million just a month ago. A secondary concern is the continuing large scale revisions post pandemic; something with the data collection/estimation process has broken but no one is saying what that is. I doubt its a conpiracy to booster the current administration, a theory is the birth/death numbers is skewed due to COVID where there was an unusual spike in entreprenuearship or new business startups, likely fraud related.