The Bureau of Labor Statistics reported non-farm payroll employment increased 151,000 in October, while the unemployment rate held steady at 9.6%. On the face of it the number looked positive. According to the Establishment Survey Data private sector job growth totaled 159,000 showing that there was an uptick in hiring in October. The real problem for the economy is that this is not enough to actually reduce the unemployment rate because it barely keeps up with new entrants into the jobs market. In a previous article we covered a study by the San Francisco Fed which showed the economy had to create 100,000 per month just keep the unemployment rate steady. This month was slightly ahead but will not materially impact the unemployment rate. To really see improvement you would have create 200,000-250,000 new jobs per month.
One of the most troubling aspects of the jobs report is the average duration of unemployed workers. The chart below shows how many people have been unemployed for 15+ weeks and 27+ weeks. Both numbers increased during the latest month by 267,000 and 83,000 respectively.