U.S. Added Jobs Last Month for First Time Since May
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|Fri, 11-05-2010 - 10:34am|
The United States economy added 151,000 jobs in October, a welcome change after four months of job losses but still not enough to make a dent in unemployment.
Private companies have been expanding their payrolls throughout 2010, according to a Labor Department report released Friday. Private job growth had been overwhelmed by the elimination of temporary decennial Census jobs and layoffs by state and local government during the summer and early fall — until October.
Companies added 159,000 jobs last month, after a gain of 107,000 jobs in September. Governments cut 8,000 jobs following losses of 148,000 positions in September. October was much stronger than expected — most forecasts were for a gain of 60,000 jobs.
The reportalso revised the numbers for August and September. The August data was revised to reflect a loss of 1,000 jobs instead of 57,000, and September was revised to 41,000 losses instead of 95,000.
“The big picture from this report and some of the others recently all points to a pickup in growth in the beginning of the fourth quarter,” said John Ryding, chief economist at RDQ Economics. “The notion that economy might be double-dipping can now be safely tossed out.”
Still, the economy has a long way to go before the world brightens for many Americans. Nearly 15 million people are out of work and actively looking, and the unemployment rate, which remained steady at 9.6 percent, has been relatively flat since May.
A broader measure of unemployment, which includes people who are working part-time because they cannot find full-time jobs and people who have given up looking for work, ticked down slightly to 17 percent from 17.1 percent in September.
Among the sectors with the strongest job growth were education and health services, which added 53,000 jobs; retail, which added 28,000; and temporary help services, which expanded by 34,900 jobs. Another encouraging statistic was the lengthening private sector workweek, which rose by one-tenth of an hour to 34.3 hours. Like the hiring of temp workers, an expanding workweek is typically seen as a harbinger of more permanent hiring.
The economy last added jobs in May, when more than 400,000 workers were hired by the federal government to help with the Census.
Citing concerns about “disappointingly slow” growth, the Federal Reserve announced on Wednesday that it would engage in more aggressive monetary policy to try to grease the wheels of growth. The Fed chairman, Ben S. Bernanke, has hinted — and other economists have more openly advocated — that more active help from Capitol Hill on the jobs and output front would also be welcome.
But the midterm elections this week, which divided control of Washington between the major parties, have raised concerns that political gridlock may prevent Congress from doing much, if anything.
In addition to the weak demand companies are generally facing, this resulting uncertainty about the fate of measures like the Bush tax cuts, which are set to expire next year, has left many businesses hesitant to take the plunge and hire more workers.
“When we don’t have a clue what two of our largest budget items are, taxes and health care, we’ve got to keep all the money we possible have,” said Patricia Felder, secretary-treasurer of Felder’s Collision Parts, a small company in Baton Rouge, La., that sells automotive parts to dealerships and body shops.
“We may need it for taxes since we have no idea what we’re looking at next year,” Ms. Felder said. “And we may need it to provide the same level of health care for employees that they got used to having.”
In the absence of Congressional action, the last tier of unemployment benefits is also set to expire soon. With little prospect of employment in the near future, many of the nation’s long-term unemployed, whose numbers hover around record highs, have become increasingly desperate.
“I hope that Congress can become human and forget about being Democrats or Republicans and just be human beings to see what it’s like for us,” said Annette Tornberg, 50, of Sacramento. She was laid off from her job at a printing company in 2009 and has been unable to find work despite sending out over 1,000 résumés. “We’re human beings, and all we want is for you to help us out.”
Still, John E. Silvia, chief economist at Wells Fargo, was somewhat more optimistic about the prospects for next year.
“Our expectation is we are going to get a positive number on a sustained basis for the next year or two,” Mr. Silvia said.
He said he expected to see about 100,000 to 150,000 private payroll jobs added on average per month in the first half of the year, which would be just barely enough to keep up with new people entering the labor force.
He said the economy was at a point where to increase output, businesses have to add workers, not just make them more productive or add hours.
“That is the phase of the business cycle we are in now,” Mr. Silvia said.Multimedia