Jobless rate drops to 9.0% (updated)
I guess when you're at the bottom, any positive news is cause for hope.
Or, if you're a partisan and need to spin anemic job numbers to make it appear that the economy is "gaining some momentum," it makes perfect sense that you would willingly put lipstick on a pig and take the sow to the prom.
Unfortunatately, you're only fooling yourself.
U.S. employment rose less than expected in October, but a drop in the jobless rate to a six-month low of 9.0 percent and upward revisions to prior months' job gains pointed to a strengthening labor market.
Nonfarm payrolls rose 80,000 last month, the Labor Department said on Friday, missing economists' expectations for a gain of 95,000.
However, figures for August and September were revised to show 102,000 more jobs than previously reported. In addition, the decline in the jobless rate from 9.1 percent in September came even as more people entered the labor force.
While job growth last month was less than expected, details of the report suggested the economy was gaining some momentum.
"It's not a game-changer but when you take into account the upward revision to prior months and the drop in the unemployment rate, it's a step in the right direction," said John Canally, an economist at LPL Financial in New York.
"It's about in line with the growth you're seeing in the economy but it's not enough to break us out of the range we're in."
No, the report does not suggest that the economy is "gaining some momentum." It suggests that we're still stuck in a rut and can't even generate enough job growth to cover workers entering the labor force on a monthly basis. And while the number of discouraged workers fell this past month, it is still extremely high thus skewing the unemployment rate and hiding the true nature of the crisis.
Nice try, Reuters.
Update from Steve McCann:
The reality behind the headline: In October the number of workers marginally attached to the labor force or discouraged rose from 2.51 million in September to 2.56 million in October. These people are not included in the unemployment rate calculation -- they were prior to 1994. Adding those workers to the overall labor force and recalculating the unemployment rate the actual rate is 10.5% not 9.0%.
Further the U-6 (which includes total unemployed, plus person marginally attached to the labor force; plus total part-time for economic reasons and the discouraged workers) came in at 16.2%. Which should be the statistic considered as the true indicator of the health of the job market.
The media is salivating over the unemployment rate getting into the 8+ per cent range as a means of resurrecting Obama. However, the average American on Main Street no longer believes the statistics promoted by the media-they can see reality all around them.