Employers added 80,000 payroll positions on net, slightly less than what economists had expected. That compares to 158,000 jobs in September, a month when the figure was helped by the return of 45,000 Verizon workers who had been on strike.
Friday’s report also showed that job growth in September and August was significantly stronger than the Labor Department initially believed it was, giving economists hope that October’s employment growth may have been better than this first estimate suggests, too.
“The underlying momentum of the economy is better now than we thought it was a few months ago,” said Augustine Faucher, the director of macroeconomics at Moody’s Analytics. “We’re doing O.K., even if we’re not doing great. The odds of a double-dip recession are lower at least.”
But even without a second recession, frustration over the sluggish recovery could still be toxic for President Obama’s re-election campaign.
October’s job gains were just barely enough to keep up with population growth, and so did not significantly reduce the backlog of 14 million unemployed workers.
The unemployment rate was 9 percent in October, slightly lower than September’s 9.1 percent but about where it has been for the last seven months. By contrast, in the year before the recession began in December 2007, the jobless rate averaged about half that, at 4.6 percent.
“It will take years for the U.S. job market to return to its pre-recession glory,” said Jason Schenker, president of Prestige Economics.
Among the biggest challenges is the army of millions of Americans who have been out of work for months or even years.
The average length of time an unemployed worker has been pounding the pavement is still unusually high, at 39.4 weeks, just shy of the all-time high of 40.5 weeks recorded in September. People who have been out of work for longer spells have significantly more trouble getting rehired for complicated reasons, including stigma and skill deterioration.
“In interviews they say they’re concerned that my base of skills has been antiquated,” said Sarah Hoppe, 43, a former account manager in Toledo, Ohio, who was laid off in July 2009.
“I tell them I have a good mind and an infinite capacity to learn,” she said, but employers still pass her over. “It’s absolutely demoralizing.”
Economists and politicians typically view the monthly jobs number as a key indicator of the nation’s economic health. But with so many potential game-changers on the horizon both in Europe and at home, the latest report may say little about what Americans should expect going forward.
The fate of heavily indebted Greece has been up in the air for about a year and a half now, and this week the political wrangling in Athens has been particularly contentious. Economists worry that if the bailout deal there falls through, a potential Greek default could set off a domino effect that brings down other fiscally troubled countries such as Italy and triggers another global financial crisis.
“The outlook ahead remains for modest growth, but risks remain to the downside without a convincing resolution of the euro zone crisis, which is conspicuously absent at present,” said Nigel Gault, chief United States economist for IHS Global Insight.
Mitigating these worries, however, is the case of MF Global, an American financial services company that filed for bankruptcy this week after making bad investments in European markets. The bankruptcy did not rattle markets as much as some economists had feared.
“We had a primary dealer file for bankruptcy this week without seeing any of the waves from 2008 related to Bear Stearns and Lehman Brothers,” said John Ryding, the chief economist at RDQ Economics, referring to two banks whose failures sent global financial markets into a tailspin.
Another potential wild card is Congress’s panel on deficit reductions, the so-called “supercommittee.” Talks have stalled, and the committee has less than three weeks before an alternative (and more draconian) plan would automatically kick in.
If government spending cuts are put into effect too quickly, they could be a severe drag on economic growth and could derail the fragile recovery, economists have said. Already governments at various levels have been steadily paring back, and have laid off, on net, 323,000 workers in the last year.
There are other domestic policy unknowns, too. Congress has not yet decided whether a 2 percent payroll tax cut and federal extensions of unemployment benefits — both set to expire in January — will be renewed. Many economists are pushing for both stimulus measures to continue.
Even if such potential shocks do not materialize, the economic outlook is still troubling.
On Wednesday, the Federal Reserve issued a downward revision in its forecast for output growth next year. Fed officials also said they expected an average unemployment rate of 8.5 to 8.7 percent in 2012. They did not announce any new stimulus measures, however, and the chairman, Ben S. Bernanke, instead strongly hinted that Congress should be doing more to boost the recovery.
Besides the upward revisions to previous job growth numbers, there were other positive signs in the latest jobs report.
Employment in temporary help services rose slightly. Employers often use temp workers before taking the plunge and hiring permanent staff.
Hourly earnings also rose by 5 cents, after a gain of 0.3 percent in September.
The length of the average workweek, however, remained flat at 34.3 hours, where it has been stuck for about a year. Companies usually work their existing employees harder before hiring additional workers, and so the stagnant workweek is not a particularly good sign for job growth.
Article source: http://feeds.nytimes.com/click.phdo?i=1470d97397032cbc504fcfb47f792e98
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