The headlines from today's monthly national jobs report are likely to focus on the unemployment rate stagnating at a still-too-high 9.1 percent, but a closer read of the report shows some signs for optimism.
The unemployment rate is defined as the ratio of (a) people who are not working but looking for work (the government's definition of unemployed) to (b) the sum of people who are working and people who are unemployed (the government's definition of being in the "labor force"). The rate changes as more people become employed. Over the last two months, the number of people who report being employed has increased by 364,500 a month. But the rate also changes as people decide to look for work. Over the last two months, the number of people in the labor force has grown by just under 400,000 people per month, which is twice as fast as population growth.
As a result of these changes, the percentage of the adult population that is now in the labor force has edged up over the last two months to 64.2 percent, and the percent of the adult population that is employed has edged up to 58.3 percent. However, when the numbers of adults who are employed and adults who are actively looking for work both grow, the unemployment rate can stagnate.
The modest growth in the percentages of the adults working and looking for work is a hopeful sign, while the fact that these percentages remain lower than a year ago is a discouraging one.
The other optimistic components of the monthly jobs report are the growth of just over 100,000 establishment-reported payrolls in September and upward revisions of job growth in July and August. Last month's job report estimated that jobs grew by 85,000 in July and were unchanged in August; this month's report estimates that July's increase was 127,000 and August's was 57,000. The growth in the number of jobs would have been even larger had it not been for the elimination of 65,000 public sector jobs over the last three months. The government reports that more than half a million local government jobs have been eliminated since September 2008, a significant drag on overall employment and on economic growth.
Overall, the job growth numbers, while far from outstanding, provide some hope that the country may dodge a double-dip recession. The country remains in a very deep hole, but for this month, at least, it doesn't seem to be digging any deeper.
