America’s Jobs Report: Good then Bad

THE EMPLOYMENT PICTURE IS LOUSY

The employment situation is still horrific, the pace of the recovery continues to be achingly slow, and many of the jobs created recently have been part-time. While the report indicates no substantive deterioration in the labor market relative to what we have come to expect, it is far from encouraging to anyone who has been disappointed by the economy’s performance over the past several years.

THE EMPLOYMENT PICTURE IS GREAT

In September, the unemployment rate plunged, unexpectedly, to 7.8%, from 8.1% in August. It was the first time it fell below 8% since January, 2009, the month that Mr Obama took office. More important was the reason it fell: not because people were quitting the labour force, but because they were finding work, by remarkable numbers.

IT’S BAD

Of the 940,000 civilian jobs created since the end of March, 819,000 were part-time. More than 87% of the total jobs created in the past six months have been part-time jobs.

IT’S GOOD

Nonetheless, it’s worth noting that the last three months now look quite a bit better than we thought just 24 hours ago. Employment has advanced an average of 146,000 per month in that time according to the payroll report, and by 186,000 according to the household report. The proportion of the population that now has a job is at 58.7%, the highest since May, 2010.

CONCLUSION

This will be a pleasant surprise for Mr Obama, who can now claim net job gains of 325,000 over his term once annual benchmark revisions are incorporated. But it is not a game-changer. People’s attitudes about the economy have been improving for a few months but are hardly at the sort of level that can allow Mr Obama to claim vindication for his policies. And today’s good news could easily be followed by more bad news in the coming weeks. It’s been like that for four years.

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