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General Electric Co
(Updated with reaction to the jobs report)
The most important jobs report of Barack Obama’s presidency came in slightly better than expected on Nov. 2, strengthening his case that the lukewarm economy is heating up. The Bureau of Labor Statistics reported that nonfarm payrolls rose by 171,000 in October. An influx of jobseekers caused the unemployment rate to rise a tick to 7.9 percent–not a bad sign, because it indicates greater confidence that the economy is generating employment opportunities.
Economists had expected a job gain of around 125,000, according to the median estimate of those surveyed by Bloomberg. The government collected data before Hurricane Sandy struck, so the numbers weren’t affected by the storm.
Barclays Research said the report showed “good momentum”‘ in the labor market. Capital Economics assessed that the report was probably not “strong enough or weak enough to have any marked impact” on the election. Among advocacy groups, Americans for Limited Government said the report was “meaningless and too late to save Obama.” The Democrats’ Center for American Progress said the report was “further proof that investing in the middle class has helped the economy and put the job market on a firm track to full recovery.”
There were no tweets about the report in the early going from either former General Electric (GE) CEO Jack Welch or Senator Chuck Grassley, the Iowa Republican. Both previously gained notoriety on Twitter for questioning the government’s honesty. Welch challenged the accuracy of the September jobs report and Grassley voiced the suspicion after Sandy struck that if the government postponed releasing the October report, it would be to hide bad numbers.
Not only was the October number better than expected, but the government revised its estimates for August and September employment upward by a total of 84,000. The August increase was revised to 192,000 from 142,000 and the September increase to 148,000 from 114,000.
October was just one more month in a recovery that technically began in June 2009, but it loomed large because the announcement came just four days before the presidential election. There is a high degree of uncertainty to the government’s estimate, making it an iffy indicator of the labor market’s strength. Bloomberg View wrote ahead of the report, “It’s bizarre that the jobs numbers wield so much influence.”
The BLS said that the civilian labor force rose by 578,000 in October. In other words, some people started looking for work but didn’t get jobs. That explains why the unemployment rate increased even though the number of people on payrolls went up.
Employment rose in October in professional and business services (51,000), health care (31,000), retail trade (36,000), leisure and hospitality (28,000), construction (17,000), and manufacturing (13,000). Government employment fell by 13,000.
The number of people employed part-time for economic reasons fell by 269,000. Average hourly earnings went down a penny to $23.58 for all employees on private nonfarm payrolls. The 1.6 percent increase in the pay measure over the past year was the lowest since 2007, when the government began tracking that particular data point.