October’s jobs report was much more positive than expected. The unemployment rate ticked up a tenth of a percentage point to 7.9 percent, but we gained 171,000 jobs — big enough to be statistically significant. Even better, we gained 84,000 jobs in revisions to August and September data. Here, as always, are the highlights, in six charts.
Unemployment and Payroll Numbers
While unemployment ticked up, nonfarm payrolls had their best month in a long time, and the August and September data is better than anticipated:
Labor force participation
What’s more, people rejoined the labor force in October, with the participation rate ticking up to 63.8 percent. If some of those people are unemployed but have just started to look for work again, that could explain why the unemployment rate is higher despite the good jobs numbers. If, alternately, those people got jobs, that would lower the unemployment rate:
Public/private
But the gains are still concentrated in the private sector, with the public sector losing 13,000 jobs last month:
Alternative unemployment measures
As I explained last month, the BLS releases six unemployment measures. There’s U3, the number that shows up in all the news article, which counts people who don’t have jobs, but have looked for one in the past four weeks, but U1, U2, U4, U5 and U6 exist as well. U1 and U2 are usually lower than U3, and measure the percentage of people who have been unemployed for 15 weeks or longer and the percentage who have lost jobs or done temporary work in the period in question, respectively.
U4, U5 and U6 are usually higher than U3. Each of these categories includes everyone in all the lower categories: all people in U3 are in U4, all people in U4 are in U5, and all people in U5 are in U6. U4 adds people who have stopped looking for work because they’ve concluded none is available. U5 adds people who would like to work but for whatever reason have not looked for work recently. U6 adds the underemployed, or part-time workers who want to be working full-time but cannot for whatever reason.
The six measures are pretty well coordinated, and U1, U3, and U4 all ticked up, while U2 and U5 were unchanged and U6 went down:
Sectoral
Different sectors were hit to varying degrees by the downturn. Construction took the heaviest hit, while health and education were barely hurt at all. Same story this past month:
Wages
Wage growth is still tepid, hitting 1.55 percent last month, well below the annual rate of inflation. In real terms, wages are falling:
