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  • Writer's pictureNick Andriacchi

October Jobs Report - More Than Meets The Eye

The October jobs number beat economists’ estimates. But something seemed off as labor participation fell and the unemployment rate increased. So what gives?


The BLS’s Payroll report is mostly a survey of big business. But much of employment in the U.S. is done by small businesses. Since the BLS doesn’t survey small businesses, it estimates a number based on a time study. That is called the birth-death adjustment. Birth-death adjustment is an adjustment made to survey-based estimates to account for the net effect of businesses opening and going out of business.


Over time, if the economy grows, small business employment grows. However, in today’s economy, small business is probably not growing very much and new business applications have been steadily declining. So, there is good reason to be skeptical about the headline data.


The end result? In October, BLS, via the B/D model, simply added +455K jobs to its survey. They weren’t counted. They were just added.

( Source: Forbes)



October Employment Summary


  • After a sharp decline in August, job openings increased to 10.7mm in September


  • Big job gainers by industry included health care, professional and technical services, and leisure and hospitality. Temp Help had another healthy gain.


  • The Household Survey, which captures data from small business, self-employed etc. showed a loss of 328,000 workers.

· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons is up to 6.8%.

· Prime age labor force participation rate (ages 25-54) was down again this month to 82.5%. It is still off by .6% from February 2020, the last month before the pandemic started.

· The overall labor force participation remained unchanged at 62.2%. This number is disappointing as it still sits 1.1% below the level of February 2020.

· In October, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.4 percent, to $32.58. Over the past 12 months, average hourly earnings have increased by 4.7 percent. In October, average hourly earnings of private-sector production and nonsupervisory employees rose by 9 cents, or 0.3 percent, to $27.86.

· In October, the average workweek for all employees on private nonfarm payrolls was 34.5 hours for the fifth month in a row. In manufacturing, the average workweek for all employees was little changed at 40.4 hours, and overtime decreased by 0.1 hour to 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls held at 34.0 hours.

· APD is reported that 239,000 jobs were added in last month.

Source: ADP, BLS, CNBC, ABC News

JOB OPENINGS AND LABOR TURNOVER – SEPTEMBER 2022

The number of job openings increased to 10.7 million on the last business day of September, the U.S. Bureau of Labor Statistics reported today. The number of hires edged down to 6.1 million, while total separations decreased to 5.7 million. Within separations, quits (4.1 million) changed little and layoffs and discharges (1.3 million) edged down. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class.


Job Openings

On the last business day of September, the number of job openings increased to 10.7 million (+437,000), partially offsetting a sharp decline in August. The rate changed little at 6.5 percent in September but was 0.8 percentage point lower than its peak in March 2022. In September, the largest increases in job openings were in accommodation and food services (+215,000); health care and social assistance (+115,000); and transportation, warehousing, and utilities (+111,000). The number of job openings decreased in wholesale trade (-104,000) and in finance and insurance (-83,000).

Hires

In September, the number of hires edged down to 6.1 million and the rate changed little at 4.0 percent. Hires decreased in durable goods manufacturing (-57,000) and in state and local government education (-40,000). .

Separations

Total separations includes quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.

In September, the number and rate of total separations decreased to 5.7 million (-370,000) and 3.7 percent, respectively. Total separations decreased in accommodation and food services (-103,000); transportation, warehousing, and utilities (-42,000); and durable goods manufacturing (-38,000).

In September, the number of quits changed little at 4.1 million, and the rate was 2.7 percent for the third month in a row. Quits decreased in construction (-56,000); transportation, warehousing, and utilities (-35,000); and durable goods manufacturing (-28,000). Quits increased in state and local government, excluding education (+15,000).

In September, the number of layoffs and discharges edged down to 1.3 million and the rate changed little at 0.9 percent. Layoffs and discharges changed little in all industries.

The number of other separations decreased in September to 299,000 (-84,000). Other separations decreased in health care and social assistance (-31,000); professional and business services (-28,000); and finance and insurance (-20,000). Other separations increased in other services (+13,000) and federal government (+3,000).

Establishment Size Class

In September, the job openings rate decreased in establishments with 5,000 or more employees. The quits rate decreased in establishments with 50 to 249 employees. For a more in-depth description of the

JOLTS establishment size class estimates, please visit www.bls.gov/jlt/sizeclassmethodology.htm.

____________

The Job Openings and Labor Turnover Survey estimates for October 2022 are scheduled to be

released on Wednesday, November 30, 2022, at 10:00 a.m. (ET).


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