November 7, 2014

Unemployment Report for October 2014


Unemployment Rate:              5.8 percent

Unemployed Americans:         9.0 million  


Employment and Unemployment

  • The Department of Labor reported an unemployment rate of 5.8 percent for October 2014, a decrease of 0.1 percentage point. It reported an increase of 214,000 nonfarm jobs over last month. This is lower than anticipated job growth of 233,000 for last month. Employment for August was revised upward from 218,000 to 203,000 jobs created, and September was revised up from 248,000 to 256,000.   
  • The number of unemployed people in October was 9.0 million, a decrease from last month’s figure of 9.3 million.
  • More than five years after the recession ended, the unemployment rate remains above the 5.2 to 5.5 percent range that Federal Reserve officials consider the long-run average, according to the Wall Street Journal.
  • The number of long-term unemployed, those unemployed for 27 weeks or more, remains at 2.9 million, accounting for 32.0 percent of the unemployed. During the 1980s, when our country faced a similar recessionary period, the proportion of long-term unemployed never exceeded 27 percent. 
  • The “real” unemployment or U-6 rate is 11.5 percent, down 0.3 percentage point from September. This is the total percentage of unemployed and underemployed workers.
  • The “real” number of unemployed Americans is 18.2 million. These are people who are unemployed (9.0 million), want work but have stopped searching for a job (2.2 million), or are working part time because they cannot find full time employment (7.0 million).
  • In October, there were 2.2 million workers deemed marginally attached to the workforce who want work but were not counted as unemployed because they had not looked for a job in the last four weeks. This figure has seen little change since October of last year. 
  • In October, employment grew by 42,000 in food services and drinking places; 25,000 in health care; and 27,000 in retail trade. Employment in the information industries decreased by 4,000; decreased by 2,500 in commercial banking; and decreased by 3,100 in local government including education.   
  • According to a Challenger, Gray & Christmas analysis released this week, U.S.-based employers announced job cuts of nearly 58,000 last month, a 68 percent increase from September’s job cuts.

Labor Force Participation

  • The labor force participation rate is 62.8 percent, up 0.1 percentage point from last month and near the lowest level in more than 36 years. Labor force participation is the same as October of last year. Prior to the recession, the rate stood at 66 percent. 
  • If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.9 percent.
  • The share of American adults with jobs in October was 59.2 percent, an increase of 0.2 percentage point over the month, and little changed for the last six months. This is more than four percentage points below its pre-recession peak. 

Wages

  • Also of concern to economists is the stagnant growth in wages. Average hourly earnings for all employees on private nonfarm payrolls rose by three cents to $24.57. Average hourly earnings have risen by 2.0 percent year-over-year.
  • October was the 63rd straight month that year-over-year hourly wage growth has been below 2.5 percent. Prior to the recession, wage growth routinely exceeded three percent. 

Issue Tags: Economy, Labor