Unemployment Rate Rises To 7.3% Even With 204,000 New Jobs
The unemployment rate for October was released by the Labor Department on Friday. The report showed that 204,000 non-farming jobs were actually added to the market. In spite of the added jobs, the unemployment rate bumped from 7.2% in September to 7.3% in October.
Economists were worried how the Government shutdown would affect the Labor Departments report for October. It seems that the damage was minimal, at least in the short term. But even the report itself was held off for a week because of the shutdown. Most experts believe the best way to gauge the reality of a growing unemployed workforce won’t come until January, after the holidays.
The new jobs created were bolstered heavily by holiday hirings. Employment increased in fields such as leisure and hospitality, retail trade, professional and technical services, manufacturing, and health care. Retail trade, such as food and beverage stores, electronics stores, and general merchandise stores, saw the greatest increase above their yearly average.
The sector most affected negatively in October was federal government employment with a 12,000 decline. Over the past 12 months, the federal government has lost 94,000 jobs. This number does not include employees that were furloughed during the government shutdown, as many of them were still paid through the 12th of the month.
The Labor Department’s data is based on two separate surveys, one of households to find the unemployment rate, another of public-sector employers and private companies to determine how many jobs the economy actually created.
Part of the tricky job growth while the unemployment rate rises can be attested to the government shutdown. In the household survey, the furloughed workers were considered unemployed but in the public sector employers survey they were considered employed. Government numbers shuffling at its best!
Economists are expecting the shutdown to impact the November report as well. One other major factor from the report that the number of part-time or marginally connected workers is growing. Although jobs are being created, they are mostly part-time.
As unemployment rates rise, the Federal Reserve is watching to see how they might need to stimulate the economy. The last thing needed in the economy is more job loss.