November 4, 2016
October 2016 Job Reports
Unemployment Rate: 4.9 percent
Unemployed Americans: 7.8 million
Employment and Unemployment
- The Department of Labor reported an unemployment rate of 4.9 percent for October, down 0.1 percent from last month.
- Today’s jobs report shows an increase of 161,000 nonfarm jobs in October, lower than analysts’ prediction of job growth around 175,000. Employment for August was revised up from 167,000 to 176,000 jobs created; and September was revised up from 156,000 to 191,000.
- In 2016, employment growth has averaged 196,000 per month, down from 229,000 per month in 2015.
- Unemployment in October among those ages 16-19 was 15.6 percent, down 0.2 percentage point from last month. For people of Hispanic or Latino ethnicity, the unemployment rate was 5.7 percent, down 0.7 percentage point from September. For African-Americans, the unemployment rate was 8.6 percent, up 0.3 percentage point from the prior month.
- The number of long-term unemployed, those unemployed for 27 weeks or more, was 2 million, unchanged from last month. They account for 25.2 percent of the unemployed, up from 24.9 percent in the prior month.
- The “real” unemployment or U-6 rate is 9.5 percent, down 0.2 percent from last month. This is the total percentage of unemployed and underemployed workers. The October U-6 level was its lowest since April 2008.
- The “real” number of unemployed Americans is 15.4 million. These are people who are unemployed (7.8 million), want work but have stopped searching for a job (1.7 million), or are working part time because they cannot find full-time employment (5.9 million).
- In October, employment grew by 43,000 in professional and business services; 31,000 in health care; 14,000 in financial activities; 11,000 in construction; and 19,000 in government. Employment in mining fell by 2,300 jobs last month. Since reaching a peak in September 2014, employment in mining has fallen by 222,300. Employment in manufacturing also fell by 9,000 jobs in October.
- In December 2015, the Federal Reserve raised its main interest by rate 0.25 percent, its first rate increase in nearly 10 years. Since then, mixed economic reports and global concerns have been noted as reasons to refrain from further adjustments. Following the Fed’s meeting earlier this week, it issued a statement stating: “Information received since the Federal Open Market Committee met in September indicates that the labor market has continued to strengthen and growth of economic activity has picked up… Although the unemployment rate is little changed in recent months, job gains have been solid … The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided … to wait for some further evidence of continued progress toward its objectives.”
- The Federal Reserve next meets December 13-14.
Labor Force Participation
- The labor force participation rate is 62.8 percent, down 0.1 percentage point from last month and remaining near the lowest level in 38 years. The labor force fell by nearly 200,000. The persistently low labor force participation rate shows that millions of Americans are staying on the sidelines. Since October 2013, the participation rate has largely been stuck in a narrow range of 62.5 to 63 percent. Prior to the recession, the rate was 66 percent.
- If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.1 percent.
- The share of American adults with jobs in October was 59.7 percent, down 0.1 percentage point from last month. This is nearly 4 percentage points below its pre-recession peak.
- In October, average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents to $25.92. Over the year, average hourly earnings have risen by 2.8 percent.
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