October nonfarm payrolls were reported at -190,000. That's the headline number. It is a better number than any unrevised numbers in over a year.
The details of the report indicate both good news and bad news. In general, the leading parts of the survey showed good news, as did some of the coincident parts. The lagging parts got worse and markedly so.
I'll dig into the details , below the fold.
The Leading Indicators:
There are some parts of the employment survey that are considered leading indicators for the economy: hours in manufacturing and hiring of temporary help. Both of those printed positive. Manufacturing hours increased 0.1/hour, as did overtime, up 0.2. Temporary help has increased on average +44,000 since July. Since businesses add temporary help before they hire permanent new workers, this is considered a leading indicator, and so is good.
The Coincident Indicators:
As indicated above, the economy lost (- 190,000) jobs in October. In absolute terms, that's obviously bad. In relative terms, though, it is less than any other unadjusted number in the last 12 months, all of which printed worse than (- 200,000) and sometime much, much worse.
Even better, the Labor Department revised August's and September's reports upward, to (- 154,000) and (- 219,000). The average number of jobs lost in the last 3 months was (- 188,000). Constrast this with the losses in the 3 previous months, which averaged (- 357,000). If we project this onto the next 3 months, we get an average of (- 19,000). In other words, there is a very good chance that the economy will actually add jobs in at least one of the months of November, December, and January.
Other data showed just how much variability there is in the data. The Institute for Supply Management showed a jobs increase in manufacturing, and a bad jobs decrease in non-manufacturing earlier this week. The BLS data was the reverse: manufacturing shed 61,000 jobs; services shed 129,000. The service that comes out (relatively) smelling like a rose is ADP, which had predicted a continued improvement to (- 201,000) for October.
In other coincident data, hours worked overall in jobs stayed even at 33.0. Aggregate hours in the economy, however, considered a good coincident indicator of the employment situation, sank (- 0.2%).
The Lagging Indicators
This was by far the worst part of the report. The Unemployment Rate surged 0.4 to 10.2%. This is the first time this has happened since 1982, and was considerably worse than expectations. This may or may not have to do with formerly discouraged workers attempting to re-enter the economy. U6, however, appears to have remained relatively stable I'll update shortly Nope, up from 17.0% to 17.6%. (I hasten to add that the best calculation is that during the Great Depression, U6 was about 36%).
The Conclusion:
(1) The economic expansion remains on track. That's what hiring of temporary help and increasing factory hours tell us.
(2) Barring the inevitable revisions, it appears that the bottom for Jobs in the economy is likely to be about the next 3 months.
(3) Unemployment is a major problem, and is going to remain a major problem throughout 2010.
My sense is that the economic expansion so far is going to look more like the 1992 version of the "jobless recovery" than the 2002 version, and is not shaping up, so far at least, as a V-shaped jobs recovery. That is, unlike 2002 but like 1992, the number of jobs in the economy may turn around relatively quickly, but like both, the percentage of unemployed people is going to be a persistent and major problem.
Obama is going to sign an extension of unemployment benefits today. That's not nearly enough. People who are unemployed and have fallen throught he cracks need help yesterday. The more this help is delayed, the worse it gets. There is also still a need for more stimulus targeted directly at jobs and wages -- and even though nobody in Washington DC is talking about it, there is still a need for a new WPA.
Finally, here is a message for elected Democrats: The monthly Jobs report is the ultimate "report card" on the economy's performance for most Americans. So far, you've done some good work given the catastrophe that was dumped in your lap, but ... You have about 9 months to turn this thing around. The hemorrhaging has been staunched, and a feeding tube is in place, but there is still bleeding, and the patient is still in the ICU. You will get support if, like FDR, you make it clear that you will move heaven and earth to try to help ordinary people. But if you don't give a damn enough to show results by next summer of increasing employment, and a decreasing if horribly high unemployment rate, don't expect the Democratic base to come out and give you a ringing endorsement of re-election.