Digging into the Jobs Numbers

 | Oct 07, 2011 | 9:38 AM EDT  | Comments
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When looking at this month's payroll report, the first thing one needs to do is to back out the 45,000 Verizon workers returning from strike, just as one needed to add them back in last month.

So, when looking at the headline gain of 103,000 jobs, we really had true employment increases of 58,000. Last month the original reported number of zero jobs being created would have been actually 45,000, but since last month's job tally was revised higher to be 57,000, that total would then become 102,000 after the Verizon adjustment.

In that sense, today's report showed fewer jobs than last month's revised figures. July payrolls, meanwhile, were revised up from 85,000 to 127,000.  These are good things. But private payrolls, adjusting for Verizon, showed an increase of 92,000 in September vs. 97,000 in August. All levels of government shed 34,000 workers.

Also, while the employment gains were weak, the number of jobs created isn't sufficient to keep up with population growth, let alone reduce the number of unemployed. The unemployment rate held steady at 9.1%. But there were a few positive developments. One was that the average workweek increased by 0.1 hours, and that average hourly earnings crept up by 4 cents, or 0.2%, after a decline of the same amount last month for both hours and wages.

Now on to the not-so-good data points. In the household survey, we see that there were 398,000 more people working (this is derived from a separate, smaller survey than the data I just cited), but all of the gains were concentrated in part-time work, as the number of people working part time, but who would like to work full time instead, increased by 444,000, and the number of willing part-timers grew by 100,000.

That means that there were fewer full time employees on staff. The ranks of the unemployed grew by 25,000, while those who were "not in the labor force" swelled by 224,000, perhaps having given up their search, even as the working-age population expanded by 200,000. The number of discouraged workers climbed by 60,000. 

And here's the really bad news: the broad U-6 measure of unemployment, which includes discouraged workers and involuntary part-timers, jumped from 16.2% to 16.5% (in May it was 15.8%) and the number of the long-term unemployed grew by 206,000, now representing 44.6% of the unemployed, up from 42.9%.

And the median duration of unemployment edged higher still, up to 22.2 weeks, up from 21.8 weeks in August and 20.5 a year ago. The average duration of unemployment looks even worse, now at 40.5 weeks, up from 40.3 last month and way above the 33.4 a year ago.

It is taking the average worker who even gets a new job nine months to find work.

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