In a stunning reversal of fortune, the U.S. economy added 159,000 private sector jobs in October, the U.S.Bureau of Labor Statistics reported this morning.
The increase, the first in five months, was more than twice what economists had expected and higher even than the most optimistic projection. However, it didn’t change the unemployment rate, which remained at 9.6 percent last month.
Analysts predicted that the strong employment report would send stocks higher today, following Thursday’s rally. Earlier signs — ADP’s National Employment Report, The Conference Board’s surveys, and other indicators — gave mixed signals about today’s report, so investors were prepared for positive news, but nothing as strong as what the BLS reported.
Indeed, the BLS revised its numbers for August and September, improving them. In August, the BLS now reports that the economy lost 1,000 jobs, rather than the initially reported 57,000. And for September the initial report of a loss of 95,000 jobs was reduced to 41,000.
Although significantly more hiring occurred in March, April, and May, nearly all those jobs were temporary Census workers. Only about 1,000 of them still remain on the government’s payroll, the BLS reported.
Local and state governments are still cutting their payrolls. Local governments shed 14,000 jobs, while the states cut another 1,500, partially offsetting the private sector increase to yield a nationwide jobs increase of 1515,000. Only in education did the government add jobs, a consequence perhaps of the school year beginning.
Article Continues Below
Most of the key unemployment numbers were unchanged in October. There were 14.8 million unemployed in the month, with 6.2 million of them out of work for 27 weeks or more (the long-term unemployed). The number of marginally attached workers stood in October at 2.6 million, up from 2.4 million the year before. Marginally attached workers are those who want work, but don’t qualify under BLS rules to be counted as technically unemployed because they didn’t look for a job in the last four weeks. Among the marginally attached, 1.2 million, an increase of more than 400,000 from October 2009, are considered “doscouraged workers,” because they have given up looking for a job.
One bright note: the number of involuntary part-time workers dropped in October 318,000 to 9.2 million.
Within the private sector, the strongest job growth came in health care (up 24,100) and in retail, which saw increases in auto sales, clothing, and electronics sales. Some of the increases can be attributed to ramping up for the holiday season, but only some, as the data is seasonally adjusted.
Temporary help continued to increase. The sector grew by 35,000 jobs during the month. Since September 2009 451,000 temp jobs have been added to the economy. Temp job hiring is typically seen as an early indicator of recovery, because employers uncertain about the future, choose to add temporary workers as work picks up.