Economix Blog: What to Look For in Friday’s Jobs Report

CATHERINE RAMPELL

Dollars to doughnuts.

The Labor Department will release its monthly jobs report on Friday morning, and economists are expecting that once again the news will be mediocre.

American companies probably added a net total of about 90,000 jobs in October, after a gain of 103,000 in September, forecasters say. (Remember, though, that the September numbers were helped by the rehiring of Verizon workers who were on strike during August.)

While job growth is, of course, better than job losses, a gain in the neighborhood of 100,000 is nothing worth celebrating. That would be just about enough to keep up with population growth, so it would not actually reduce the backlog of unemployed workers.

As a result, economists expect the unemployment rate to stay flat at 9.1 percent. If they’re right, that would mean that the unemployment rate has not fallen below 9 percent in seven months.

The outlook for the coming year is not much better: On Wednesday, the Federal Reserve’s forecast for economic growth next year was revised downward. Fed officials expect an average unemployment rate of 8.5 to 8.7 percent in 2012.

Those figures also do not seem to have factored in whatever mayhem could result from the European debt crisis.

The fate of Greece has been up in the air for about a year and a half now, and this week talks over the conditions of a deal to ease the Greek debt burden have been particularly contentious. Economists worry that a possible Greek default could set off a domino effect that takes down Italy and other indebted countries, potentially causing another global financial crisis. And as you may recall, earlier upheaval — the tsunami in Japan, the Arab Spring, severe winter storms, the debt ceiling debacle in Washington — caused previous economic forecasts to look far too optimistic.

Besides the headline numbers in Friday’s report,  pay attention to:

• The share of working-age people who are actively participating in the labor force, either by working or looking for work. This share has been alarmingly low in recent months, indicating that many workers are sitting on the sidelines because they find the job market so discouraging.
• The average duration of unemployment. The average length of time workers have spent fruitlessly looking for work has reached record high after record high, climbing to 40.5 weeks in September. And that number would not even include people who have been out of work for longer but gave up their job search.
• The length of the work week. Before employers take the plunge and hire more workers, they often work their existing employees longer. But average weekly hours for private employees have been mostly flat at about 34.3 so far this year. We’ll see if hours picked up in October.

Article source: http://feeds.nytimes.com/click.phdo?i=8d07d461617a54283cc0c9d10c55ac16