October 22, 2013;Bureau of Labor Statistics


The partial government shutdown delayed the release of the October jobs report by the Bureau of Labor Statistics. The headlines were that total nonfarm payroll employment rose by 148,000 jobs in September, and the unemployment rate was roughly 7.2 percent, down a statistically insignificant 1 percent from August’s 7.3 percent. Unemployment for Asians was 5.3 percent, for whites 6.3, Latinos 9.0, and blacks 12.9 percent.

Overall, it looked like nothing much changed in September. There were still 4.1 million Americans who have been jobless for 27 weeks or more, classified as long-term unemployed. The civilian labor force participation rate was still around 63.2 percent, and the number of people working part-time for economic reasons; that is, classified as involuntary part-time workers, was 7.9 million. The average workweek was also pretty much unchanged at 34.5 hours.

Is this jobs report a sign of stability, sluggishness, stagnation, or what? For nonprofits, there are some aspects to note, not necessarily good economic news:

  • This report covers the month prior to the 16-day government shutdown. As a result, the numbers for October should be expected to show a potential job loss, as the shutdown sucked $24 billion out of the economy, according to Standard & Poor’s. With the reverberations of the shutdown causing delays in future BLS reports, the November jobs report will be issued later than usual too (on November 8th, instead of November 1st).
  • The jobs increase is not good. Economists had expected the report to be 185,000 or even as high as 200,000. Last year’s monthly jobs increase was 185,000, which is itself pretty low for generating jobs sufficient to cover population growth and reduce the rolls of the unemployed—148,000 jobs a month isn’t going to do it.
  • Economist Jared Bernstein prefers a quarterly rather than monthly analysis of job growth. He noted that job growth averaged only 143,000 per month in the July/August/September quarter, down from 182,000 in the previous three-month period, and 207,000 in the quarter before. It paints a gloomy picture for Bernstein: “We’re four years into a recovery that began in the second half of 2009, yet unemployment is still highly elevated, and job growth is once again decelerating,” he writes. “Where is all that growth going? Clearly, not so much to those who depend on paychecks but to those who depend on asset portfolios.”
  • Worried about the short-term and longer run effects of the October shutdown, economists have responded to the October jobs report with concerns about the potential impacts of future fiscal disruptions as Congress and the White House near budget and debt deadlines in early 2014. The result could mean that the much-ballyhooed recovery, unseen by the millions still unemployed or out of the labor force entirely, might be facing rough sledding for the next few months, particularly if rogue elements of the Republican Party sound like they’re aiming for more standoffs.
  • According to Dean Baker of the Center for Economic Policy Research, cited in Mother Jones, the October jobs report “continues the pattern that we have seen throughout the recovery as the unemployment rate falls mainly because workers leave the labor market. The unemployment rate is now down by 2.8 percentage points from its 10.0 peak in October of 2009. However, the employment rate is up just 0.4 percentage points from its low point hit in June of 2011.”

With the jobs numbers all but assured to show a downward jolt in the next jobs report, and if the nation’s political leadership can’t get its act together to show forward progress toward the next fiscal deadlines, the economy will be in trouble. Nonprofits on the front lines are undoubtedly seeing the impact of the sluggish economy right now in the communities they serve. The economy hasn’t turned around by a long shot. The pattern looks like it is devolving into a new normal of low job creation numbers, low labor force participation, high long-term unemployment, and too many economically-necessitated part-time jobs.—Rick Cohen