Barely There Job Growth in the U.S.

The Friday, 7 Oct. 2011, Employment Situation report from the Bureau of Labor Statistics shows 103,000 jobs were added in September.

The jobs number includes about 45,000 striking Verizon workers returning to work, making the number net new jobs created in September about 58,000. This sluggish job growth continued the trend of the past five months, which was about 72,000 new job created per month. That average job creation was a slowdown from the average growth rate in the prior 14 months – 123,000 from March 2010 to April 2011.

The unemployment rate was steady for the third straight month at 9.1%, but at the current rate of job creation it will rise again soon.

Fewer workers than forecast filed for unemployment payments last week, a sign companies may be slowing the pace of layoffs, another report today showed. Applications for jobless benefits increased by 6,000 in the week ended Oct. 1 to 401,000, U.S. Labor Department data shows.

Economists had projected 410,000 claims, according to the median estimate in a Bloomberg News survey. The monthly average dropped to the lowest level since the end of August, according to Bloomberg.

Analysis from the Economic Policy Institute:

Long-term unemployment
The share of unemployed workers who have been unemployed for more than six months increased to 44.6% in September, not far off its record high of 45.6% in the Spring of 2010. The number of workers who have been unemployed for more than six months increased by 208,000 to a total of 6.2 million in September. The number of unemployed who had been jobless more than a year was 4.4 million in September (not seasonally adjusted), up from 4.3 million one year ago. This is unsurprising given that there have been more than four unemployed workers per job opening since January 2009.

Labor force participation and the employment-to-population ratio
The labor force participation rate (LFPR) increased to 64.2% in September, back to where it was in the Spring. September’s LFPR increase came from workers under 25 and over 54, while the LFPR of “prime age” workers (workers age 25-54) held steady. Remarkably, the overall labor force has seen almost no net growth (+81,000) since the recession started, though the working-age population grew by over seven million in that time. There are currently 2.6 million “marginally attached” workers in this country. If these workers were in the labor force and counted as unemployed, the unemployment rate would be 10.5% (the U-5 measure of labor underutilization) instead of 9.1%.

At a time like this, with the labor force not growing at a steady pace, arguably the cleanest measure for assessing labor market trends is the employment-to-population ratio, which is simply the share of the working-age population that has a job. This measure increased by one-tenth of a percentage point to 58.3% in September. Again, the increase occurred among workers under 25 and over 54, with workers age 25-54 seeing a decline from 75% to 74.9%, near the low for the downturn of 74.7% in December 2009.

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