The American economy gained 150,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at an anemic 60,000 jobs. The headline unemployment rate ticked up again to 3.9%.
The jobs estimates for August and September were revised downward by 79,000. The trendline for net new jobs is now very close to zero:
The unemployment rate has increased by a full half point since the beginning of the year:
Both the Employment-Population ratio and the Labor Force Participation Rate went down in October. Overall, this is a fairly miserable jobs report.
So ... the stock market loves it, right?
They believe the Fed has stopped raising rates and we hopefully have a soft landing
Employment is actually on an upward trend, a little steeper than in the long expansion period 2010-2020:
https://fred.stlouisfed.org/series/ADPWNUSNERSA
Of course the rate of adding jobs has decreased from what it was in the immediate post-covid period, but there is no reason to think from these numbers that we are heading for a recession. The numbers are consistent with another period of expansion as in 2010-2020. That growth was slow but steady.
On the other hand the employment numbers do not preclude a recession from specific causes. One such potential cause is the raise of interest rates. Kevin has discussed the abundant evidence that the effects of such raises are delayed.
If economic predictions ever have any validity it is from considering specific factors, not from drawing curved trend lines (or even straight lines).
Say... Were there any major strikes during that period? Just askin...
I thought previous jobs reports were bad because there were too many new jobs. Is it possible for Joe Biden to have a good jobs report? This is a serious question.
This is right up your alley, KD. https://www.threads.net/@justinwolfers/post/CzG8vhEO9xj
The various pieces of this report are incongruent. Net new jobs increased faster than population, but the unemployment rate went up. The only reason I can think of for that happening is that the labor force grew faster than the population as a whole, which is to say that the labor force participation rate went up. However, we are told that the labor force participation rate went down.
My conclusion: at least one of those measurements is wrong.
Some numbers come from the household survey, some from the employer survey. There are always delayed responses, hence the adjustments to prior months. Both measurements are noisy, so inconsistencies are frequent. If you are lucky, noise cancels out somewhat in moving averages.