US Adds 204,000 Jobs in October Despite Shutdown

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The US added 204,000 new jobs in October. The unemployment rate edged up by less than a tenth of a percent. The data were muddled by the government shutdown

The US added 204,000 new jobs in October. The unemployment rate edged up by less than a tenth of a percent. The data were muddled by the government shutdown

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  • 1. Economics for your Classroom from Ed Dolan’s Econ Blog US Job Growth was Strong in October but Data were Muddled by Shutdown November 8, 2013 Terms of Use: These slides are provided under Creative Commons License Attribution—Share Alike 3.0 . You are free to use these slides as a resource for your economics classes together with whatever textbook you are using. If you like the slides, you may also want to take a look at my textbook, Introduction to Economics, from BVT Publishing.
  • 2. 204,000 New Payroll Jobs in October  Payroll jobs grew by 204,000 in October, a little better than the average for recent months  August and September data were revised upward by a total of 60,000  Goods producing industries gained 35,000 jobs, more than in recent months, but most new jobs were in services  The federal government lost jobs but state and local government gained November 8, 2013 Ed Dolan’s Econ Blog
  • 3. Unemployment Rate Rises Slightly  The US unemployment rate rose to 7.28% in October, up slightly from its low of 7.24% in September.  The unemployment rate is the ratio of unemployed persons to the labor force. The labor force decreased by 720,000 for the month. The number of employed workers fell by 735,000 and the number of unemployed increased by 17,000  The unemployment rate is based on a survey of households that is separate from the payroll jobs survey. Unlike the payroll survey, it includes self-employed and farm workers November 8, 2013 Ed Dolan’s Econ Blog
  • 4. Effects of Government Shutdown  The payroll survey counts a “job” as a person who works or is paid for the reference date. Because federal workers were paid for time spend on furlough, the shutdown did not affect payroll data.  The effect on the household survey was more muddled. Furloughed workers should have been counted as “on temporary layoff,” that is, unemployed.  Instead, some were erroneously counted as “employed but temporarily absent from work.” For that reason, the impact of the shutdown on the unemployment rate was understated November 8, 2013 Ed Dolan’s Econ Blog
  • 5. Broad vs. Standard Unemployment Rate  The BLS also provides a broader measure of job-market stress, U-6  The numerator of U-6 includes  Unemployed persons  Marginally attached persons who would like to work but are not looking because they think there are no jobs, or for personal reasons  Part-time workers who would prefer full-time work but can’t find it  The denominator includes the labor force plus the marginally attached  U-6 rose to 13.8 percent in October November 8, 2013 Ed Dolan’s Econ Blog
  • 6. Involuntary Part-time Work Decreases  One component of the broad unemployment rate consists of people working part-time “for economic reasons,” popularly known as “involuntary part-time” employment.  This category includes workers who would like full-time work but can’t find it, or whose employers have cut their hours below full time  Involuntary part-time work rose in October, helping to push U-6 higher. November 8, 2013 Ed Dolan’s Econ Blog
  • 7. Long-term Unemployment Falls to Low for Recovery  The recession and slow recovery have been characterized by unusually high levels of long-term unemployment  The percentage of the unemployed out of work for 27 weeks or more fell to 36.1 percent, a new low for the recovery  Both the median and mean duration of unemployment decreased November 8, 2013 Ed Dolan’s Econ Blog
  • 8. Employment-Population Ratio Near All-Time Low  The civilian employment-population ratio dropped to 58.3 percent in October, near the all-time low reached in 2011  The drop in this ratio reflects both weak labor market conditions and an aging population November 8, 2013 Ed Dolan’s Econ Blog
  • 9. For more slideshows and commentary, follow Ed Dolan’s Econ Blog Like this slideshow? Follow @DolanEcon on Twitter Click here to learn more about Ed Dolan’s Econ texts
  • 10. For more slideshows and commentary, follow Ed Dolan’s Econ Blog Like this slideshow? Follow @DolanEcon on Twitter Click here to learn more about Ed Dolan’s Econ texts