October jobs report suggests drop from today's 9% to 8% unemployment ahead--in 2013

11/04/2011 12:22 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

The U.S. economy added slightly fewer jobs—80,000 versus expectations of 85,000—in October than economists had projected, the Bureau of Labor Statistics announced this morning. But with revisions to the September data showing the economy added 158,000 that month instead of the 103,000 reported last month, I think this is enough to keep the story essentially unchanged.

The U.S. economy is adding jobs, but at such a low rate that it will take until 2013, according to the Federal Reserve, to reduce the current 9.0% unemployment rate to 8.0%. It would take steady gains of 150,000 jobs a month to reduce unemployment at an appreciably faster rate. The official unemployment rate dropped to 9.0% from 9.1% in October. That’s the lowest level for the official unemployment measure in six months.

The full-employment rate, which counts discouraged workers who have stopped looking for work and workers in part-time jobs who would like full-time work, fell to 16.2% from 16.5% in the month.

The private sector added 104,000 jobs in the month but even that modest increase was dragged lower by job losses in the local and state government employment. Local and state governments cut 22,000 jobs in the month. Another 2,000 jobs were lost at the federal level.

Average weekly hours worked remained steady at 34.3 hours in October. With hourly wages climbing 0.2% that produced a 0.3% increase in earnings for the month. That’s enough to support modest growth in consumer spending as we head into the holiday shopping season.

 

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