Now is not a good time to be an American worker, particularly an unemployed one. At 10.2 percent, the unemployment rate is the highest since 1983. Given the economic growth we’ve had since the summer, it is likely the jobless rate is at or extremely close to peaking. However, concern remains that businesses, fearing how much health-care “reform” could raise insurance costs, may be more reluctant to hire than they normally would be given the improvement in the overall economy.
Today’s news did have some silver linings. Including the revisions to prior months, net payroll losses were 99,000 in October, many fewer than earlier this year. Meanwhile, temp jobs — often a leading sign of overall job creation — increased for the third month in a row. In addition, average hourly earnings increased 0.3 percent in October and are up at a 2.8 percent annual rate in the past three months, a slight acceleration from earlier this year. Productivity growth has been extremely rapid of late, part of the ongoing process of technological change that rivals (and may surpass) the Industrial Revolution. In the short term, this process lets companies raise production even as they continue to cut jobs. Over time, though, higher output with lower labor costs means more profits, which will help stimulate rapid job growth once companies become more confident about the durability of the economic recovery.
— Bob Stein is senior economist with First Trust Advisers.