When Is 261,000 New Jobs Disappointing?
Guest blog by Dr. Tom Cunningham, Economist and MST Advisory Services, Senior Advisor- Economics
U.S. employers created 261,000 new jobs in the month of October, a number nowhere near the expected 325,000 as jobs lost in September to the hurricanes in Texas and Florida were restored. And while the rebound is disappointingly small, one shouldn’t make too much of the report. As always, we warn against giving too much credence to any monthly move, but in particular this time in light of the hurricane-induced noise.
What was not so disappointing is the continued decline in the unemployment figures. The headline number, U3, fell another tenth of a percentage point in October, to 4.1 percent, the lowest since prior to the Great Recession. The broader measure of employment, the U6, was also down substantially, 0.4 percent to 7.9 percent. Earnings were essentially unchanged.
Overall, employment growth has been substantially above fundamental population growth. Job openings in the U.S. remain at record levels: over six million reported open positions, and currently just slightly more than seven million unemployed workers. As well, GDP has come in surprisingly strong recently. Our economy continues to hum along nicely and continued growth is a reasonable and supportable forecast at this point. If you’re looking for a downside, one looming threat is a worker shortage.
Perhaps the most noteworthy economy-related event of recent days was the appointment of Jerome Powell as Fed chair. Powell is well respected by the Board and financial community. He appears to have good judgment and has sided with Chair Yellen on almost all policy matters. Powell represents continuity.
About the Author
Tom Cunningham holds a Ph.D. in economics from Columbia University and was senior economist with the Federal Reserve Bank of Atlanta from 1985 to 2015. Mr. Cunningham serves as a consultant to MST in the creation and ongoing development of the MST Virtual Economist and is the MST Advisory economics specialist.
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