Fri November 2, 2012
Jobless Rate At 7.9 Percent; 171,000 Jobs Added
Originally published on Fri November 2, 2012 10:43 am
RENEE MONTAGNE, HOST:
This is MORNING EDITION from NPR News. I'm Renée Montagne.
STEVE INSKEEP, HOST:
And I'm Steve Inskeep. Good Friday morning to you. Let's dig into the meaning of the final jobs report before Election Day. The unemployment rate rose a bit, to 7.9 percent. But in a separate survey, according to the government, the economy added a net 171,000 jobs in October. It's an economic story, it's a political story, so we've brought in NPR political reporter, Tamara Keith, as well as economic correspondent John Ydstie, to our studios to talk about this. Good morning to you both
JOHN YDSTIE, BYLINE: Hi Steve.
TAMARA KEITH, BYLINE: Hi Steve.
INSKEEP: John, let's start with the numbers. What do those two numbers, 7.9 percent, 171,000 jobs more - what do they mean?
YDSTIE: Well, they seem to tell two different stories. You have an uptick in the unemployment rate, but we also have pretty strong job growth. What happened with the unemployment rate, is that it rose because there was an influx of over a half million workers into the labor force. And remember, last - during September, during the last report - the unemployment rate dropped quite sharply. A lot of economists thought that had overshot the reality on the ground and that we'd get an uptick.
INSKEEP: This is the (unintelligible).
YDSTIE: That's why we got the uptick in the unemployment rate.
INSKEEP: But the unemployment rate remains below eight percent, you do have that net gain of jobs. How strong a number is 171,000, though?
YDSTIE: You know, it's enough to bring the unemployment rate down, slowly, but not (unintelligible).
INSKEEP: Over time.
YDSTIE: Over time. Just barely enough. It's about 50,000 more than economists had expected. And then there was a revision upwards in August and September of 84,000 jobs. So over the last three months you've got an average of 170,000 jobs being created - that's a bit more than the average for the last couple years, of around 150,000. Now, you know, it's stronger, I think - I think we're growing jobs faster than we thought we were, but I don't think this is any significant change in the trajectory of the economy.
INSKEEP: Tamara Keith, it sounds like if you're a presidential candidate from either party, you've got something you can grab from this report and talk about.
KEITH: Absolutely. And basically, they've grabbed the same thing that they've grabbed every report for the last six months, at least. They, sort of, responded very predictably. From the White House, the chairman of the council of economic advisors, Alan Krueger, in a statement today, while more work remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to heal from the wounds of the great recession. And then, from Governor Romney, he says today's increase in the unemployment rate - keying in on the negative here - is a sad reminder that the economy is at a virtual standstill. The jobless rate is higher than it was when President Obama took office. And this is one of these classic cases of political economics, where you take a number, you choose your starting point to make the comparison. Both campaigns do this. And in the case of the unemployment rate, it's interesting. It was 7.9 - it was 7.8 percent in January of 2009, it is 7.9 percent now. But many on the Democratic side would say well, but, you can't start in January, the president wasn't president for most of that time, you should start in February of 2009 when the unemployment rate was 8.3 percent. So pick your starting point.
INSKEEP: Or Democrats might even argue, well there was a recession for several months afterward that they would not blame on the president. But in any case, you've still got a labor market that is a lot weaker than it has been in past years - 7.9 percent unemployment is a high rate. Two quick questions. You're saying that - John Ydstie - you're saying that job creation of 171,000 a month is enough to bring down unemployment very, very slowly.
YDSTIE: Very slowly.
INSKEEP: Years away.
YDSTIE: Years and years away. We really need a quarter of a million jobs a month to bring it down. It takes a couple of years - several years of that to get it back down to where it was pre-recession. Now we're still three percentage points above where unemployment was before the recession.
INSKEEP: Then there's another layer of this, the quality of the jobs that are being added when jobs are being added. Are these lots of part time jobs, are these lots of low paying jobs, for example?
YDSTIE: You know, we can't really tell that from this report. Part time jobs, I think, have stayed pretty steady. We did see an uptick in manufacturing jobs again this month. They had declined for the past two months, after being very strong coming out of the recession, really leading us out of the recession. But they've been suffering because of markets overseas, the headwinds from Europe and the slowdown in China.
INSKEEP: Tamara Keith, very briefly, after the candidates finish making their interpretations, could this have a significant political effect?
KEITH: Probably not. A third of people are expected to vote before Election Day. Three million people have already voted in Florida, and many people made up their minds long ago about what the deal is with this economy.
INSKEEP: Okay, NPR's Tamara Keith, thank you very much.
KEITH: Thank you.
INSKEEP: And NPR's John Ydstie, thank you as well.
YDSTIE: You're welcome, Steve.
INSKEEP: And again, the unemployment rate, 7.9 percent now - 171,000 new jobs net created in October. Transcript provided by NPR, Copyright National Public Radio.