Friday, November 5, 2010

Unemployment Rate Holds at 9.6%

The increase of private sector jobs, more then the expected, is a good sign. It will have to increase significantly more to put a dent in the unemployment.

"Still, hiring remains far too weak to drive down unemployment, now stuck at 9.6 percent. And the newly elected Congress will come under pressure to take action to accelerate job growth.

The burst of hiring -- 159,000 net jobs added by private employers -- nevertheless raised hopes that companies are finally emerging from the hiring stall seen during much of the summer.
When government job cuts -- which totaled 8,000 last month -- are factored in, the economy added 151,000 jobs in October, the Labor Department's report showed Friday. It marked the first increase in total payrolls in five months. All the momentum came from private companies.
There were 14.8 million people unemployed in October. Adding those people to others who are working part time but would prefer full-time jobs and those who have given up looking for work, nearly 27 million are "underemployed."

That's 17 percent of the labor force. It's down a bit from September's 17.1 percent. Still, the new "underemployed" figure remains close to a record high set last year.

Economists say it would take up to 300,000 new jobs a month to reduce the unemployment rate significantly.

The news may be worse then advertised.

"labor force participation has now dropped to the lowest rate it has been since 1984, at 64.5%. Assuming a reversion to the long-term average participation rate of 66%, means that the civilian labor force is in reality 157.4 million as opposed to the disclosed 153.9 million, a delta of 3.5 million currently unaccounted for. Maybe someone can ask the president during his imminent press conference what happened to the unemployed population, which would have been 18.3 if this labor force delta was incorporated, resulting in an unemployment rate of 11.6%."

Picture embedded below.

To put this in the contexts of the last year; after rising to %9.5, 'fake' falling to %9.4, rising to %9.7, and then rising again to 9.8%, and rising again to 10.2%, dropping to 10%, held steady, dropping to 9.7%, held steady, held steady again, increased to 9.9%, dropped to 9.7%, fell to 9.5%, holding steady, rising a tick to 9.6%, and held steady, and has held steady again.

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