Expectations Mild For October's Jobs Numbers

Friday morning, the Labor Department releases its unemployment report for October. The unemployment rate has been stuck above 9 percent for most of the past three years, and it's not expected to dip below that this month. Host Renee Montagne speaks with NPR's Jim Zarroli about the numbers and the outlook for the U.S. economy.

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RENEE MONTAGNE, HOST:

The Labor Department has just announced the U.S. unemployment rate fell a bit in October, to nine percent. The overall job growth was still relatively weak. The government says employers added just 80,000 jobs to their payrolls during the month. To find out what this means, we turned to NPR's Jim Zarroli. Good morning.

JIM ZARROLI, BYLINE: Good morning.

MONTAGNE: Jim, take us through the numbers and tell us what happened on the jobs front in October.

ZARROLI: Well, this is a disappointing report. There are some positive things in it, too, though. The disappointing part is the number of new jobs created was still well below what is needed to keep pace with population growth. Government hiring once again fell, and that brought down overall hiring levels. But even if you look at the private sector, job creation was just not terribly strong. Construction was down, manufacturing down. There were gains in some places like leisure and hospitality, business and professional services, but they weren't very big. So, you know, economists were predicting this would not be a very good report, and it was not. It's not the kind of report, certainly, that President Obama wants to see, heading into a reelection campaign.

MONTAGNE: So, the economy is not growing fast enough to create a lot of jobs, but the unemployment rate did go down a bit. How does that work?

ZARROLI: Yeah, this is an issue that always comes up. It's - I think it's worth explaining, cause it confuses so many people. The unemployment rate and the job creation numbers are based on different surveys. One is based on the survey of households, the other, on businesses. Generally, economists give a bit more credence to the business survey number, which is the one that says we had 80,000 new jobs. Not to say the unemployment rate is wrong, it's just compiled in a different way. It's not unusual for them to diverge, though over time, they tend to move together.

MONTAGNE: So, you said that there was some positive news in this report. What is that?

ZARROLI: A few things. Labor Department always goes back and revises the numbers when they've had a chance to look at the data. And they say job creation was actually much stronger in August and September then we had thought. In September, for instance, we had 191,000 new jobs in the private sector. That is a pretty good number. It was offset again by a drop in government hiring, especially at state and local levels. The other things that were positive - the length of the average work week ticked up a bit. Also, there was a drop in the number of long-term unemployed - those are people who have been looking for work for 27 weeks or more. The longer people are out of work, the less likely it is that they will ever get decent jobs again. So that's a number a lot of economists tend to worry about it. And we saw some improvement there.

MONTAGNE: Just one last thing. There's been a lot of talk about the economy slowing down this year. Does this report shed any light on what the prospects are in the future?

ZARROLI: Yeah, we did see a slowdown in the spring, because of some temporary factors – like the Japanese earthquake, which hit manufacturing hard. There have been some people who have predicted that we will head back into a recession, which is something that definitely seems likely to happen in Europe. But I think these numbers, and some of the other economic numbers that have come out lately, they're not recession numbers. We're sort of back to where we were at the beginning of the year, which is, you know, moderate slow growth, nothing to write home about, but not a recession.

MONTAGNE: Jim, thanks very much.

ZARROLI: You're welcome.

MONTAGNE: NPR's Jim Zarroli.

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