The Jobs Report Is Finally Out, But Does It Tell Us Anything?
The economy added 204,000 jobs during the month of October, according to the Bureau of Labor Statistics, and unemployment increased slightly to 7.3 percent, compared to 7.2 percent for September. However, due to the government shutdown, there’s some question as to whether that information is both accurate and significant.
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The fault, if any, is not with the BLS, which released a fact sheet last week explaining how the shutdown would affect both its data collection practices and the interpretation of the data.
“One of the strengths of the Employment Situation news release is that it presents data from two separate surveys to provide a more complete picture of the U.S. labor market. The shutdown brings into focus some of the differences in concepts measured by the household survey and the establishment survey,” says the BLS.
The Wall Street Journal explained that while the establishment survey would be largely unaffected, the household survey could suffer.
The major issue is that furloughed government workers were technically unemployed, and therefore counted in that 7.3 percent unemployment rate. Employment increased in retail, hospitality, health care, manufacturing, and professional and technical services.
“This is good news for the economy,” John Silvia, chief economist for Wells Fargo, tells the Washington Post. “Take it at face value.”
Silva says, however, that the labor force participation rate (which declined to 62.8 percent from 63.2 percent) suggests that the gap between the long-term unemployed and those with jobs is growing. The number of long-term unemployed (36.1 percent of all unemployed) held steady at 4.1 million — 954,000 fewer than last year.
We’ll have to wait until December and January to know for sure how the economy is doing. The PayScale Index predicts a 0.8 percent growth in wages for the fourth quarter of 2013.
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