October’s jobs report showed a gain of 204,000 people to nonfarm payrolls. That is a pace of 1.5 million job additions for 2013. Many earlier months have been better. The Bureau of Labor Statistics (BLS) reported in September that in the previous 12 months the average addition was 185,000 a month. The agency also pointed out that September’s unrevised 148,000 rate was well below that. The downward trend has now hit two months in a row.
At the current pace, the national economy will add about 2.2 million jobs in 2013. The numbers for October, November and December could pull that rate well down, if they worsen. And a worsening would not be a surprise. The Washington battles over the deficit and debt ceiling took a toll on economic growth, according to most economists. There is anxiety that will happen again in the first quarter, as Congress and the administration battle over the same issues.
Corporate earnings have been lackluster so far this earnings season, and most of America’s largest companies have already issued their reports. The restructurings in the wake of the recession have not ended. Large companies like Merck & Co. Inc. (NYSE: MRK) and several of the country’s largest banks are still in the process of firing workers.
One argument that unemployment may not get much better is the huge number of people who have been looking for jobs for a long time. Growth of the economy has not put a dent in these numbers. A really healthy jobs market would at least pull some of these people out of the unemployed column. Private business and government have not had robust confidence to do so. The BLS reports that in September:
Approximately 11 million workers remain idled. Of those, the number of long-term unemployed, those without a job for 27 weeks or more, stands at approximately 4 million or about 40 percent of the unemployed.
The most pertinent question about whether the economy will add two million jobs in 2013 is not the exact number, but whether it is 200,000 above or below that line. What is extremely pertinent is the extent to which job creation can bring down the 11 million figure substantially and at a rapid pace. For now, the answer is no.
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