October 2015 Employment Change

The October report on the Employment Situation arrived from the Bureau of Labor Statistics yesterday (link) and was, you might say, well received. BLS reported a gain of 271,000 jobs—well above the 200K level that is generally anticipated. Indeed, this month’s result has been the best for October since the end of the Great Recession as shown in the following graphic:

 To be sure, the data are subject to revision and may therefore eventually turn out to be either even better or be revised downward. The second best performance came in 2010 (a gain of 248K jobs)—when, it seemed, the economy behaved as if a normal, meaning rapid, recovery would be taking place. But 2010 did not quite deliver.

The regular month-by-month report is presented graphically below:

October looks good, but the exuberant sentiment in the media may well be premature. Personal observation while shopping—and scattered reports in the business press—suggests that an almost desperate Retail Sector was pushing everything back in time lest it miss out on what may turn out, again, to be a weak-ish holiday season.

October looks good, but projections for the year as a whole (see the next graphic) still has 2015 under-performing 2014:

A look at the job gains in some detail, thus sector by sector, also reveals signs of chronic weakness. Thus the highest gains were scored by Professional and Business Serives (78K), Health Care and Social Services (56.7K), Retail Trade (43.8K – presumably staffing up for the holidays), and Leisure and Hospitality (41K). Four sectors showed loss of jobs (Mining and Logging, Transportation and Warehousing, Utilities, and Information (Publishing and Media). Manufacturing added zero jobs! Thus the more “serious” sectors were at zero or negative growth. In other words, let’s curb our enthusiasm.

The media make much of the fact that unemployment has now reached 5 percent; but I don’t trust that number. It does not count those who’ve given up looking for work…