The Labor Department’s October jobs report showed hiring below expectations, but there are several bright spots. The government’s economists revised upward job growth data for August and September, and in October, more people looked for work rather than left the job market.
People are coming back into the labor force and getting jobs," said Tara Sinclair, economics professor at George Washington University and economist for Indeed.com. "Seeing that pick up was really exciting."
The unemployment rate ticked down to 5.8 percent from September’s 5.9 percent for the right reasons — because people joined the labor force and found jobs rather than quit searching. Household surveys showed 416,000 people joined the labor force and 683,000 found jobs, a 0.1 uptick in the labor force participation rate to 62.8 percent. But about half the labor force gain was among teenagers 16- to 19-years-old.
The economy added a net 214,000 jobs in October. While job creation no doubt surged in lower-paid service jobs, with 41,800 jobs added in restaurants and bars, professional, business service positions, typically full time, accounted for 37,000 jobs.
Still, labor force participation, the number of Americans employed or looking for work, remains at a 36-year low.
The initial job growth estimate is below the consensus from Thomson Reuters’ poll of 233,000 and under the average 222,000 jobs added over the past 12 months. Still, economists say the job growth is strong.
And differences of 200,000 month-to-month are quite small compared to the 130 million people employed at any one time.
“Any number above 200,000 would be considered to be strong,” said Paul Ashworth, chief U.S. economist for Capital Economics. “I wouldn’t complain about that.”
Some economists had forecast much higher gains for October. And with two significant upward revisions — August from 180,000 to 203,000 and September from 248,000 to 256,000 — some say we can expect upward revisions to the October data.
“I expect that today's ‘soft’ October payroll jobs gain will be revised up, as usual, closer to 250,000 next month,” said Stuart Hoffman, chief economist for PNC Financial Services Group, in an email.
Others like Ashworth are more cautious, asserting that it’s too early to tell whether the past data will be revised up or down.
“Just because the two previous months were revised up doesn’t mean it will be revised up again,” he said. “Economists tend to say, ‘Oh I got the number wrong, so the number should be moved up to match me because I’m clever.’ I got the number wrong too, but I don’t necessarily think it will be revised up.”