The US added 204,000 new jobs in October. The unemployment rate edged up by less than a tenth of a percent. The data were muddled by the government shutdown

1. Economics for your Classroom
from
Ed Dolan’s Econ Blog
US Job Growth was Strong
in October but Data were
Muddled by Shutdown
November 8, 2013
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2. 204,000 New Payroll Jobs in October
 Payroll jobs grew by 204,000 in
October, a little better than the
average for recent months
 August and September data were
revised upward by a total of 60,000
 Goods producing industries gained
35,000 jobs, more than in recent
months, but most new jobs were in
services
 The federal government lost jobs
but state and local government
gained
November 8, 2013 Ed Dolan’s Econ Blog

3. Unemployment Rate Rises Slightly
 The US unemployment rate rose to 7.28%
in October, up slightly from its low of
7.24% in September.
 The unemployment rate is the ratio of
unemployed persons to the labor force.
The labor force decreased by 720,000 for
the month. The number of employed
workers fell by 735,000 and the number
of unemployed increased by 17,000
 The unemployment rate is based on a
survey of households that is separate
from the payroll jobs survey. Unlike the
payroll survey, it includes self-employed
and farm workers
November 8, 2013 Ed Dolan’s Econ Blog

4. Effects of Government Shutdown
 The payroll survey counts a “job” as a
person who works or is paid for the
reference date. Because federal workers
were paid for time spend on furlough, the
shutdown did not affect payroll data.
 The effect on the household survey was
more muddled. Furloughed workers
should have been counted as “on
temporary layoff,” that is, unemployed.
 Instead, some were erroneously counted
as “employed but temporarily absent from
work.” For that reason, the impact of the
shutdown on the unemployment rate was
understated
November 8, 2013 Ed Dolan’s Econ Blog

5. Broad vs. Standard Unemployment Rate
 The BLS also provides a broader
measure of job-market stress, U-6
 The numerator of U-6 includes
 Unemployed persons
 Marginally attached persons who
would like to work but are not
looking because they think there
are no jobs, or for personal reasons
 Part-time workers who would prefer
full-time work but can’t find it
 The denominator includes the labor
force plus the marginally attached
 U-6 rose to 13.8 percent in October
November 8, 2013 Ed Dolan’s Econ Blog

6. Involuntary Part-time Work Decreases
 One component of the broad
unemployment rate consists of
people working part-time “for
economic reasons,” popularly
known as “involuntary part-time”
employment.
 This category includes workers who
would like full-time work but can’t
find it, or whose employers have cut
their hours below full time
 Involuntary part-time work rose in
October, helping to push U-6 higher.
November 8, 2013 Ed Dolan’s Econ Blog

7. Long-term Unemployment Falls to Low for Recovery
 The recession and slow recovery have
been characterized by unusually high
levels of long-term unemployment
 The percentage of the unemployed
out of work for 27 weeks or more fell
to 36.1 percent, a new low for the
recovery
 Both the median and mean duration of
unemployment decreased
November 8, 2013 Ed Dolan’s Econ Blog

8. Employment-Population Ratio Near All-Time Low
 The civilian employment-population
ratio dropped to 58.3 percent in
October, near the all-time low
reached in 2011
 The drop in this ratio reflects both
weak labor market conditions and an
aging population
November 8, 2013 Ed Dolan’s Econ Blog

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10. For more slideshows and commentary, follow Ed Dolan’s Econ Blog
Like this slideshow?
Follow @DolanEcon on Twitter
Click here to learn more about Ed Dolan’s Econ texts