Maybe the federal government should have stayed shut down. If it had, then we wouldn’t have to pick through the lousy September jobs report for some good news. And it isn’t easy. Nonfarm payrolls increased just 148,000 last month, the Labor Department said, less than the 180,000 that Wall Street economists had been expecting.
Now maybe this number will be revised higher.But right now it suggests a decelerating labor market — not one that’s gaining momentum. As economist Justin Wolfers points out, quarterly job growth over the past four quarters has declined from 209,000 (4Q 2012) to 207,000 (1Q 2013) to 182,000 (2Q 2013) to 143,000 (3Q 2013). To put that quarterly number in context: At a 143,000 jobs a month, it would take until 2022 — eight years and 10 months — before the job market returned to pre-Great Recession levels, according to the Hamilton Project’s Jobs Gap calculator.
Not much reason in these numbers for the Federal Reserve to taper its bond buying: Barclays: “In light of the moderate tone of the September employment report, we have pushed out our expectation for the first Fed tapering in the pace of asset purchases to March 2014 from December 2013. We now expect the Fed to finish the asset purchase program in September 2014, later than our previous expectation of June 2014.”
A few other points:
1. While the unemployment rate dipped to 7.2%, the employment rate — that share of the adult civilian population with a job — stayed flat at 58.6%. (See above chart.) It’s barely risen from its recession lows and is exactly where it was in November of 2009.
2. Likewise the labor force participation rate remained unchanged at 63.2%. It if were back at pre-recession levels, the jobless rate would be 11.2%. Factoring out demographics probably gives you a “real” jobless rate in the 9-10% range. Indeed, the broader U-6 unemployment-underemployment rate dipped just a bit to 13.6%.
3. One bit of good news is that the September data suggest that for now at least, Obamacare is not causing a surge in part-time employment at the expense of full-time jobs. Last month, according to the volatile household survey, full time employment was up 691,000, part-time employment down 594,000. So since last December, the economy has created about 1 million full-time jobs vs. a loss of 100,000 part-time jobs. From The Wall Street Journal: “The uptick in part-time employment earlier this year now looks like a statistical blip: Part-time employment fell in late 2012, then rebounded in early 2013, and has now fallen for two consecutive months.” See the BLS charts below:
4. We are still a ways off from the 5% unemployment rate Team Obama predicted for September 2013 if Congress passed its $800 billion stimulus plan.