This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.nytimes.com/2016/11/05/business/economy/jobs-report.html

The article has changed 6 times. There is an RSS feed of changes available.

Version 4 Version 5
Last Economic Snapshot Before the Election Shows Healthy Job Growth Last Economic Snapshot Before the Election Shows Healthy Job Growth
(about 9 hours later)
The government, delivering the last major snapshot of the economy before Election Day, reported on Friday that employers added 161,000 workers in October, a performance that suggested a healthy outlook for the months ahead. The last time the unemployment rate was running this low was in early 2008. But by Election Day that year, the economy was in sad shape and getting worse by every measure. Hundreds of thousands of jobs were vanishing, housing prices were plunging, paychecks were shrinking and credit was tight.
The official unemployment rate dropped to 4.9 percent, from 5 percent. And average hourly earnings rose 2.8 percent year over year, a level not reached since 2008. On Friday, in the last economic snapshot before voters go to the polls, the government reported that the jobless rate fell to 4.9 percent in October, matching the level in February 2008. Today, though, most economic bellwethers are showing improvement. Particularly encouraging was the fact that hourly wages rose 2.8 percent compared with a year ago, the best gain in more than seven years.
“It was pretty positive across the board,” said David Berson, chief economist at Nationwide Insurance, adding that “most importantly, we got a nice jump in average hourly earnings and that actually corresponds with other data.” The economy’s escalator may be slower and narrower than Americans expect, but it is now going up instead of down.
While the final weeks of the presidential campaign seemed to be preoccupied with everything but the economy, Friday’s report from the Labor Department refocused attention — at least briefly — on the crucial bread-and-butter issue: jobs. For the candidates, the latest employment report serves as a Rorschach test, allowing each side to offer its own distinctive narrative of the economy’s performance and prospects. “The economy set three postrecession records this month,” said Jed Kolko, chief economist at the online jobs website Indeed, citing solid wage growth, a drop in the number of discouraged and underemployed workers, and a return of prime-age men and women to the labor force. “These are all signs that the labor market continues to strengthen and is at its strongest point since the crisis,” he said.
As Vincent Reinhart, chief economist at Standish Mellon, explained, “The main message is from the payroll report: Jobs are being created and earnings are going up.” But a report that goes “right down the middle of the fairway,” he added, “means you can spin it any way you want.” While the presidential candidates have lately been talking about almost everything but the economy, the new Labor Department report refocused attention — at least briefly — on the crucial bread-and-butter issue: jobs.
Donald J. Trump, who was propelled to the top of the Republican ticket in part by nagging economic anxiety and a surge in voter anger among the white working class, has emphasized the negatives. All the upbeat assessments from economists on the right and left, though, were strikingly at odds with the gloomy portrait frequently drawn at election rallies.
He has argued that jobs have been disappearing, highlighting the continuing loss of well-paid manufacturing jobs as production moves to other countries. October’s report showed continued decline in that sector, with the loss of 9,000 jobs. Donald J. Trump, who was propelled to the top of the Republican ticket in part by nagging economic anxiety and voter anger among the white working class, doubled down on the negatives on Friday. At a rally in New Hampshire, Mr. Trump labeled the latest jobs report “an absolute disaster,” and said “nobody believes the numbers anyway.”
The Democratic candidate, Hillary Clinton, by contrast, has emphasized the progress that President Obama made in digging the country out of the recession, pointing to the creation of roughly 15 million jobs since 2010. Hillary Clinton has emphasized President Obama’s success in digging the country out of the recession, pointing to 73 consecutive months of job growth in the private sector. “We got some good news this morning,” she said on Friday at Heinz Field in Pittsburgh. “I believe that our economy is poised to really take off and thrive.”
The data on Friday also showed that more jobs were created in August and September than previously estimated. The revisions showed 44,000 more positions had been created, bringing the monthly average over the last three months to 176,000. Even more encouraging was the robust bump in wages, the most concrete sign that the labor market is tightening, and that ordinary workers are finally getting a slice of the rewards. Yet Mrs. Clinton, too, acknowledges wide pockets of economic discontent. “We need to make sure the economy is working for everyone,” she added, “not just those at the top.”
“This is money in the bank for workers feeling like they’ve been waiting a long time for this piece of the economic recovery puzzle to be added,” said Mark Hamrick, Bankrate.com’s senior economic analyst. Those repeated economic dirges have stuck in many voters’ minds, echoing like a jingle you can’t get out of your head.
Jed Kolko, chief economist at Indeed, a jobs listing website, noted that the economy “set three post-recession records this month.” Wage growth is at its strongest point; the employment-to-population ratio for prime age workers reached 78.2 percent, its highest level since 2008; and the broadest measure of employment, which includes discouraged and underemployed workers, fell to 9.5 percent. Even if it is out of sync with their personal situation, “people’s perception of seemingly objective information is very much influenced by what they hear from their party candidates and leaders,” said Thomas E. Mann, a resident scholar at the Institute of Governmental Studies at the University of California, Berkeley.
“These are all signs that the labor market continues to strengthen and is at its strongest point since the crisis,” Mr. Kolko said. “The more dystopian views that Republicans have is basically a consequence of what they’re hearing from Donald Trump and other Republicans,” Mr. Mann explained. As for Mrs. Clinton, he said, she wants to make clear that she is not ignoring the plight of people who are struggling.
More than seven years after the recession ended, employment gains have been remarkably steady, finally leading to a rise in earnings in the last couple of years. But overall economic growth has remained modest and despite the recent improvements, the recovery has failed to deliver to many Americans the sense of job security and steady advancement that traditionally girds the middle class. Mark J. Rozell, a political scientist at George Mason University in Virginia, agreed that campaign messages can sometimes drown out other signals. “Many people who feel their own personal situation is improving are still inclined to believe the rhetoric,” he said.
The type of jobs created is one reason. “Where we are creating jobs is in service areas, which are not as productive as manufacturing, and lower paying,” said Mr. Reinhart of Standish Mellon. “So we’ve got a problem.” More than seven years after the recession ended, employment gains have been remarkably steady, finally leading to a noticeable rise in earnings. Consumers are confident enough to open their wallets and spend. Gas is cheap, home prices are bouncing back and interest rates are low.
At the same time, many employers complain about a shortage of qualified workers. Since 2010, 15 million jobs have been created. With unemployment below 3 percent in some metropolitan areas like Denver and Madison, Wis., many employers now complain about a shortage of qualified workers.
“It has been tough to hire good people,” especially near cities like Baltimore, Washington and Philadelphia, said Scott Nash, the founder and chief executive of Mom’s Organic Market, which operates 17 grocery stores between Virginia and New Jersey and employs more than 1,000 people. Mr. Nash offers a starting wage of $12 an hour, significantly above the mandated minimums in the areas where his stores are. He said he planned to hire an additional 200 workers, from cashiers to managers, over the next 12 months. “It has been tough to hire good people” at a starting salary of $12 an hour, said Scott Nash, the founder and chief executive of Mom’s Organic Market, which operates more than a dozen grocery stores between Virginia and New Jersey and employs more than 1,000 people.
As the recession has receded, the definition of what economists consider a strong or weak employment report has shifted. So what now should be considered normal growth? The combination of turnover rates and higher wages suggests that workers, particularly those equipped with higher education and advanced skills, are more willing to take a risk and quit a current job in search of a better one.
Last month, when the government reported that in September, 156,000 additional jobs were created and the unemployment rate was 5 percent, Mr. Trump labeled it “terrible.” By contrast, some members of the Federal Reserve Board argue that the labor market is already close to the goal-post — the lowest level of unemployment that a healthy economy can sustain without igniting inflation. “There are more middle-skill jobs at higher salaries,” said Ian Siegel, chief executive of ZipRecruiter, which distributes jobs postings primarily from small and midsize businesses. “It’s a great time to be a job seeker.”
Taking into account population growth and an aging work force, economists at the San Francisco Fed estimated the “break-even” point — growth that is sufficient to keep the jobless rate from rising — now ranges from 50,000 to 110,000 jobs a month. Additional jobs would most likely push the unemployment rate further down, while fewer could lift it. Many Wall Street analysts said the positive economic news would make it even more likely that policy makers at the Federal Reserve would increase the benchmark interest rate before the end of the year.
Record low participation rates in the labor force, however, suggest that a sizable number of people might be lured back into the work force for the right job at the right wage. Still, the financial crisis and the slow-but-unspectacular expansion have left visible scars. Overall economic growth has remained modest. Despite recent improvements, the recovery has failed to deliver to many Americans the sense of job security and steady advancement that traditionally girds the middle class.
Ian Siegel, chief executive of ZipRecruiter, which distributes job postings primarily from small and midsize businesses, said he saw a substantial jump in listings last month. The type of jobs created is one reason. “Where we are creating jobs is in service areas, which are not as productive as manufacturing, and lower paying,” said Vincent Reinhart, chief economist at Standish Mellon. “So we’ve got a problem.”
“There are more middle-skill jobs at higher salaries,” Mr. Siegel said. His assumption is that rather than seeking talent at the top of the skills ladder, employers are increasingly willing to train new employees. “It’s a great time to be a job seeker,” he said. The economic divide has political shadings. Counties where President Obama scored highest in the 2012 presidential election contained more workers in new economy sectors like technology and health care.
ZipRecruiter defines middle-skilled jobs as those that require vocational training, related on-the-job experience or an associate degree. By contrast, many areas that swerved heavily Republican four years ago were more likely to rely on traditional blue-collar industries like manufacturing, agriculture and trade.
Mr. Siegel also expects to see a large upswing in temporary hiring of low-skilled workers by retailers and related industries, like parcel delivery, as businesses gear up for the holiday season. While the health care, financial and business and professional service sectors kept chugging forward, 53,000 manufacturing and nearly 11,000 mining jobs have disappeared in the last year.
Uncommon Goods, an online retailer located in Brooklyn, plans to add hundreds of temporary employees to its 170-person work force by the end of the year, said Dave Bolotsky, the founder and chief executive. Over the next year, he expects to create 20 to 30 full-time positions, with a starting wage of $14 an hour. “If you can pay above market rate, it’s a sign of appreciation or respect,” said Mr. Bolotsky, who supports an increase in the mandated minimum wage. The rise of temporary gigs and unpredictable work schedules have also contributed to the sense of instability.
As for high-skilled workers, Tara Sinclair, an economist at Indeed, noticed a decline in postings for technology jobs, a closely watched sector that makes up a relatively small portion of the overall labor market. Corners of the labor market remain in the shadows, as people who could potentially work instead sit at home, so discouraged about their prospects that they rarely bother to look. Overall participation in the labor force has been dragging below 63 percent, down from over 66 percent before the recession. Scraping by on disability payments or help from family, some in this group, including former factory workers, might be lured back — but only by the right job at the right wage.
“It seems there’s a little bit more caution that what we were seeing nine months ago,” Ms. Sinclair said. “For a while every company needed a data scientist, thinking ‘I don’t know what it is, but I want one.’ Now they may be asking ‘What is going to be the business value of hiring these people?’” For older workers and those who have been unemployed for months or years, age discrimination or outdated skills have shut down routes back to work.
This week, the Fed announced it was once again holding off on any increase in its benchmark interest rate, but indicated a December bump was likely. In its statement, the policy-making committee noted that inflation still remained below the target long-run goal of 2 percent annual growth. Yawning inequality continues to divide the ultrawealthy and everyone else.
Ted Wieseman, an economist at Morgan Stanley, noted the employment picture showed plenty of signs of resilience. “Unemployed workers have been dropping out of the labor force in smaller numbers, and there’s been a pickup in formerly discouraged workers starting to look for work again,” he said in his employment report preview. The rate of workers being fired has also remained low this year. “A sense of struggle and a belief that things are not going to change and this is the new normal has fueled a lot of the angst in this politically charged environment,” Mr. Rozell of George Mason University said.
While noting the startling disconnect between the data and the campaign rhetoric, Mr. Rozell said many in the middle-class had been genuinely squeezed. “This is not merely a perception but a reality,” he said, “that they’re either running in place or falling a little bit more behind.”
But for all the challenges, there are clear signs that the job market has markedly improved and that the economy is continuing to advance.
“The main message from the payroll report: Jobs are being created and earnings are going up,” Mr. Reinhart of Standish Mellon said. But it is also a report that “goes right down the middle of the fairway,” he said, which means “you can spin it either way.”