The hard-hit U.S. job market may be starting to rebound. For the first time in five months, in October the economy added jobs, posting an overall increase of 151,000 jobs and 159,000 in the private sector. The small difference between those numbers reflects the government jobs that were cut in October.
Overall, it's a much better-than-expected report. A Bloomberg survey had forecast an addition of 60,000 jobs overall, with 80,000 coming in the private sector. Still, because of population increases and more people out looking for work, the month's unemployment rate stayed stuck at 9.6%.
The Labor Department also had more good news looking back at the previous two months. It revised the total job losses for September and August much lower, netting a gain of 110,000 jobs. September's job losses were chopped to 41,000 jobs from the initial estimate of 95,000, and August's loss was nearly wiped out, going to a minuscule 1,000 from the previous 57,000.
Widespread Increases Across Sectors
Also on the plus side, average hourly earnings increased 5 cents to $22.73 per hour. The average workweek for all employees rose 0.1 hour to 34.2 hours. A 0.1 hour increase equates to about 100,000 new jobs.
In October, temporary jobs -- considered a leading indicator for permanent hires -- increased 35,000, and employers have now added 451,000 temporary positions since September 2009.
Major increases by sector: Retail added 28,000 jobs, health care 24,000, food services also 24,000, mining employment 8,000, computer systems design/related tech services 8,000, auto dealerships 6,000, and appliance/electronics stores 5,000.
On the downside, entertainment/recreation lost 26,000 jobs, and manufacturing employment fell 7,000.
A Record Tenure Above 9.5%
October's 151,000 job gain represents perhaps the best news for the U.S. economy in 2010, but it didn't prevent the economy from notching another record. The 9.6% unemployment rate means that measure has exceeded 9.5% for 15 straight months -- the longest since the Labor Department started tracking this stat in 1948.
And it's that prolonged period of unemployment -- and the fact that the U.S. economy is operating well below its potential -- that prompted the Federal Reserve to announce a second stage of its quantitative easing program, the so-called QE2, in which the Fed will buy up to $600 billion more in U.S. Treasury securities through June 2011. The additional stimulus brings the maximum amount of Fed securities purchases in each month to about $110 billion.
On Nov. 3, the Fed said that while it "anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow." It added that it "will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability."
Of course, that stubborn unemployment rate and the recovery's tepid pace were major factors in Tuesday' s congressional election, in which the Republicans took control of the House by gaining 60 seats (nine are still undecided). The Democrats also lost six Senate seats but retained control there (with one seat still undecided). Gallup surveys conducted this year through election day consistently ranked unemployment/economy as the most important issue among voters.
That's not going to change soon. Given the relationship between jobs and voter satisfaction, it behooves both parties to find common ground and implement policies that create jobs and lower the unemployment rate. After all, the 2012 election is less than two years away.