An economist from Ball State says the jobs report shows the labor market is improving slowly, but he says there is still a lot of underlying weakness.
The Labor Department says the economy created 214,000 jobs in October, while the nation‘s unemployment rate fell to 5.8-percent, down a tenth of a point from September.
"The problem is about 140,000 of those jobs should be going to people entering the labor market due to natural population or demographic growth," said Mike Hicks, director of the Center for Business and Economic Research at Ball State University. "So that means about 80,000 new jobs for the 10 million or so who are unemployed."
The biggest job gains in October came in leisure and hospitality (24 percent), business and professional services (17 percent), retail (13 percent), health care and social assistance (13 percent), and manufacturing (13 percent).
“Employment continues to expand at a rate that would accommodate only new workers who should be entering the labor market,” says Hicks. “Wages are remarkably stagnant, and indicators of labor market stress continue through October."
Another possible downside to the report is an indicator that businesses are not hiring as many seasonal employees for the holidays this year.
"We typically see a spike in the number of people holding more than one job this time of year," Hicks said. "There are about 200,000 fewer of these people than there were in month-to-month change last year."
While the labor force increased slightly in October, the participation rate of 62.8-percent remains at a historical low. Average hourly earnings remained stagnant and hourly wages, when adjusted for inflation, were flat, with declines in durable goods, trade, transportation and utilities, warehousing, and education and health services.
