U.S. Job Market
Is the worst finally over for the U.S. job market? And, by extension, for Americans looking for work? REUTERS

The low-down on the U.S. economy in October? A modest total, as 80,000 new jobs were created -- below the Bloomberg consensus estimate of a 103,000 job gain.

However, job gain totals for September and August were revised substantially higher: September to a gain of 158,000 from the initially-estimated 103,000-job gain, and August, up to 104,000 from 57,000.

Also, the unemployment rate in October ticked down to 9.0 percent from 9.1 percent.

Hourly earnings rose 0.2 percent in October and the workweek was unchanged at 34.3 hours. The broader U6 U.S. unemployment rate decline to 16.2 percent from 16.5 percent in September.

Is A Job Growth Trend Forming?

Further, although the October 80,000 job gain was below economists' consensus estimate, institutional investors will likely emphasize the prior months' upward revision dimension to the report. The reason? The large, revised gains are indicative of a strengthening job market. One large-revision month can be deemed a fluke, but two large, revised gains will be more than enough for hedge funds and investment funds to hit the buy button regarding stocks they've had an eye on.

What's more, so far during this expansion the U.S. economy has added about 125,000 jobs per month -- substantially below the norm for the first two years of an economic expansion.

Sustained monthly employment increases of about 125,000 are needed just to keep the U.S. unemployment rate from rising, and gains of roughly 150,000 and higher are needed to reduce it substantially.

In October, the professional services sector added 32,000 jobs, leisure/hospitality 22,000, health care 12,000, and mining, 6,000.

On the downside, the construction sector lost 20,000 jobs, and government lost 24,000 jobs. The latter continues a long-term trend. In fact, that's been one key factor in this recovery's below-normal job growth. Even as the private sector first stabilized, and now appears to be adding jobs at a modest pace, the public sector continues to downsize, due to austerity measures. No one can predict the size / role of government in the years ahead with any certainty, but economists say this much is clear: if government does not add positions, that places all-the-more pressure on the private sector -- both corporations and non-profit organization -- to add positions.

Gains in Perspective

What's more, investors should keep the U.S. economy's recent job gains in perspective: over the past three months, the economy has added 342,000 jobs -- or roughly what's needed to keep the unemployment rate from rising. Also, so far during the current expansion, the economy has recovered about 2.1 million of the 8.7 million jobs lost during the Great Recession. That is an enormous job hole -- one that will likely require the discovery of new engines of growth -- new sectors of plentiful jobs -- in the quarters and years ahead.

Job Market/Economic Analysis: Wall Street will likely cheer the October jobs report due to the aforementioned encouraging revisions to prioro months, but at least initially that was not the market's reaction: the Dow Jones Industrial Average was down about 75 point to 11,970 in the first hour of trading.

Longer-term, institutional investors will probably take the upper-hand, particularly if subsequent economic data show that the U.S. economic recovery is not stalling. Thursday's third quarter worker productivity report that showed a 3.1 percent increase indicate a Corporate America sector that, despite sluggish U.S. consumer demand and European sovereign debt concerns, continues to find ways to increase output per employee per hour, and that historically translates in to higher earnings.

Job seekers should also take some consolation. True, the nation remains short about 14 million full-time jobs, and two years in to the recovery, job growth still is not adequate, but it appears that the U.S. economy is now set to add more than 100,000 jobs per month in a sustained way. That's not close to the 175,000 to 250,000 new job per month characteristic of a robust job market -- and the level economists want to see -- but the recent trend is a step in the right direction -- and one has to start somewhere; and job seekers will take any good news they can get.