Friday, November 4, 2011

Unemployment Dropped to 9.0% in October on 80,000 New Jobs

Payroll employment increased by a modest 80,000 jobs, however the small number of new jobs were enough to push the unemployment rate down to 9.0% according to a Bureau of Labor Statistics report released this morning. The big news in the report was the upward revisions of the previous two month’s gains, which were revised up by a total of 102,000 jobs. During the past six months payrolls have increased by an average of 90,000, well below the growth needed to significantly drop the unemployment rate.

Private sector payrolls increased by 104,000, significantly lower than September’s gain of 191,000. The public sector continued to drag on employment gains, shedding 24,000 jobs, up from 33,000 jobs shed in September. The primary driver of private sector jobs remains the service sector, which added 114,000 jobs. The goods producing sector shed 10,000 jobs after adding 29,000 in September. One bright spot in the goods producing sector was manufacturing employment, which posted a gain of 5,000, offsetting August and September’s decline.

Despite weak growth in October the unemployment rate dropped to 9.0%. While it is good to see the unemployment rate dropping, we are going to need to see significantly higher growth if we want to see any significant changes in unemployment going forward. The labor force participation rate held steady at 64.2%.

Read the report.

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