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Jobs Report Shows Positive Signs, But Wages Remain Low
Four days before election day, new statistics indicate the US economy added 171,000 new jobs in October, inching the unemployment rate up from 7.8 to 7.9 percent.
The Bureau of Labor Statistics also revised statistics for September and August to reflect greater increases than previously reported, and that the employment-to-population rate increased to 58.8 percent, the highest level since August 2009.
"On the whole the data in the October report, together with the upward revisions to the prior two months' data, show a somewhat brighter picture of the labor market," said Dean Baker, co-founder of the Center for Economic and Policy Research, in response to the report. "It appears that the economy is sustaining a rate of job growth in the range of 160,000-180,000 a month. This is consistent with a modest rate of decline in the unemployment rate."
Other statistics were also positive, including that "the number of discouraged workers was 154,000 below its year-ago level."
"The most disturbing aspect of today’s report is the continuing decline of wages," argues former secretary of labor Robert Reich. "Average hourly earnings climbed 1.6 percent in October from the same time last year. That’s not enough to match the rate of inflation – meaning that hourly earnings continue to drop in real terms."
"The biggest challenge ahead isn’t just to get jobs back," he continued. "They’re coming back. It’s to raise the wages of most Americans."
The statistics came as an unexpected surprise to some observers, who expected an increase of 125,000 jobs.
"Friday's strong numbers were a surprise," Kevin G. Hall reports in McClatchy newspapers. "Private-sector job creation in month was 184,000 but the 13,000 lost government jobs dragged down the overall number."
Jobs increased in the professional and business services sector (51000), health care (31,000), retail trade (36,000), construction sector (17,000) and manufacturing (13,000), among others, The Guardian reports.
But the news was not all good, with the report indicating that the number of people employed part-time for economic reasons fell by 269,000 to 8.3 million.
In a separate comment head of the report's release, Reich warned Wednesday that the report shouldn't influence voters in the presidential election, although it likely would. Reich noted, "a small shift away from September's readings… has no statistical significance, and there fore should have no political significance."
In truth, no one should base their vote on tomorrow’s labor report is because a single month’s report isn’t a reliable gauge of which way the economy is heading. A report that the unemployment rate is 7.8 percent, for example, means only that the BLS is 90 percent sure the real rate lies between 7.6 percent and 8.0 percent. By the same token, an announcement that the economy created 100,000 jobs in October means the BLS is 90 percent sure the number of new jobs is between 90,000 and 110,000.
And Baker warns that positive reaction to the news should be tempered by the fact that "with the economy still down by more than 9 million from its trend level of umeployment," at this rate full employment would not occur until the end of the decade.
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