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Unemployed people search for jobs in an employment office in the southern Californian town of El Centro.
Just a heads-up: the Bureau of Labor Statistics will release preliminary employment numbers for October tomorrow morning. Typically, observers look to the ADP report for advance insight into what BLS might report. This is from the Wall Street Journal:
Hiring by private-sector employers remained modest last month. The ADP National Employment Report showed employers added 110,000 jobs in October, down slightly from the revised 116,000 jobs added in September.
For the past few months, the data has been kind of heavily doubted and debated before the BLS official stats emerge. The concern has been that expectations will be gravely disappointed. 100,000 new jobs added will suddenly become...zero!
However, the anxiety seems to have moderated. Initial jobless claims are starting to look like they're falling off, preparing move below 400,000 for a sustained period as GDP growth picks up. The upshot is that the economy isn't getting worse, but it isn't really poised to blast off, either.
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Jobs are not easy to come by in this economy, but at least a second recession now seems unlikely.
The BLS released the preliminary September employment numbers this morning. Unlike last month, when the economy added an adjusted 57,000 private-sector jobs, this month the economy managed 103,000.
This was a lot better than some forecasters had predicted (the revised August numbers, +57,000 versus the Big Zee-Roh, were also welcome). Before today, I had seen September numbers ranging from zero to 130,000. The ADP report, a much-watched measure that comes out before the government total, anticipated 91,000 — the same number it anticipated last month — so the fact that we came in well above that is a cautiously positive sign.
The BLS report should quash speculation that we are heading for a double-dip recession, or that we're in some kind of quasi-recession right now. Felix Salmon doesn't think so — he's making more of a long-term malaise argument — but if we can avoid some kind of debt cataclysm in the Eurozone, then we may be able to turn the ocean liner at this point.
This chart is from a Bureau of Labor Statistics working paper that was released in 2008, titled "Self-Employment Transitions among Older American Workers with Career Jobs." I know that's from a few years back — and the data itself is drawn from the 1997-2004 period — but you can see a clear trend: As workers age, they increasingly consider moving into self-employment. Particularly men. Some of this probably has to do with ongoing financial needs in retirement. But the data comes from a study of people aged 51-61, so the "transition" from full-time work to self-employed work is taking place well before the typical retirement age.
Now connect this trend with what Sara Horowitz, founder of the Freelancers Union, has recently been saying about the changing nature of work in the Atlantic. You can then see that the "Gig Economy" isn't just about younger workers who are stuggling to find full-time jobs. It's also about older workers who are seeking new ways to work, either out of desire or necessity.
The BLS jobs report that hit this morning was…how to put it? Demoralizing? Particularly headed into a holiday weekend that's supposed to celebrate the American worker. As some commenters have already pointed out, that fact the U.S. economy added zero — yes, zero — jobs in August is both depressing and symbolic.
Depressing because it came in well under even worst-case scenarios produced yesterday by the likes of Goldman Sachs, which had anticipated a fairly demoralizing 25,000 jobs to be added (Take that, starry eyed Goldman optimists!). I guess you could throw up your hands and say, Well, at least we didn't drop into negative territory! The national unemployment rate stayed at 9.1 percent (and presumably, the California rate will stay stuck at 12 percent, with L.A. County above that at 12.4 percent — that data will come later in the month).
The official August employment numbers will be released by the BLS tomorrow. But a few other notable sources have already provided data:
- ADP reports the the economy added 91,000 jobs, a decrease from July
- Goldman Sachs cut its estimate from 50,000 jobs added to 25,000
Meanwhile, the economic consensus is expecting something in the neighborhood of 100,000 jobs added to non-farm payrolls.
The economist Peter Morici, who's been hammering away at the jobs problem for over a year now, summed up an unpleasant situation rather nicely at CNBC:
The economy must add 130,000 jobs each month to accommodate a growing adult population seeking work.
The key factor stifling jobs creation is sluggish GDP growth, which only advanced 1.3 percent in the second quarter and 0.3 percent in the first. Businesses can’t hire and pay new workers without more customers.