The Labor Department will release its October jobs report at 5:30 a.m. ET Friday morning, making good on its promise to not allow Superstorm Sandy to prevent Bureau of Labor Statistics (BLS) economists from delivering the last batch of national employment data before next Tuesday's election.
In September, job growth was weak, with only 115,000 new jobs added. But the unemployment rate — the headline number that most people who aren't economists pay attention to — fell in eye-catching fashion, to 7.8 from 8.1 percent. This set off a frenzy of conspiracy-oriented speculation that the books had somehow been cooked.
We probably don't have something similar in store for us with Friday's numbers. The ADP employment report — from a national payrolls processor — came out today and said 158,000 jobs were added in October, many at large businesses (81,000), but also quite a few at small businesses (50,000).
ADP can be close to the government number or miss wildly. Bloomberg, meanwhile, surveys economists every month to arrive at a consensus projection. For October, the number is 125,000, with a range of about 30,000 to 170,000.
This is all consistent with what I've termed a "stuckflation" economy: slow growth in the aftermath of the financial crisis, a contrast with 1970s-style "stagflation," in which the economy was saddled with high unemployment but also high inflation. (We lack the latter right now.)
It's no stretch to predict the economy didn't add 200,000 jobs in October. However, it may have gotten closer than ADP or Bloomberg expect. Third quarter U.S. GDP came in at two percent, after languishing at just above one percent for previous quarters. The Big Three carmakers all had relatively good Octobers, with Chrysler doing particularly well, seeing its sales improve 10 percent year-over-year — its best October since 2007.
Retail sales in October were also up by a decent margin.
For September, we also saw the jobs tally for August and July revised up, indicating that while the economy isn't in good shape, it's been in somewhat better shape than we thought. That came through in the higher third-quarter GDP number.
The big question for Friday isn't whether we'll get some off-the-hook number — 200,000-plus is about the best possible outcome, and even that would be 200,000 new jobs below where we'd like to be. The big question is whether the headline number — the unemployment rate — will rise or fall. Some economists expect it to rise from 7.8 to 7.9 or even 8.0. But others figure that a still-falling labor-participation rate will drop it below 7.8.
The U.S. labor participation rate is at levels not seen since the early 1980s and has become an important third datapoint to consider with the monthly jobs report, alongside the number of jobs added and the unemployment rate.
What do I think? I think we'll get close to the ADP number, and maybe do even better. I don't like two percent GDP growth. What would be better is three percent. But it's a solid improvement over one-ish percent.