This morning the BLS reported 146,000 new jobs, a greater than expected number in light of the assumed impact of Sandy on employment. Although state level data is not yet available, the BLS indicated that preliminary findings showed relatively little impact from the storm. The report brings the 2012 YTD monthly average job creation to 151,000, just slightly above the November numbers and very similar to the 153,000/month average in 2011. The average levels of job creation over the past two years are sufficient to make some quite limited progress against the huge overhang of unemployed from the surge of job losses during the official beginning and end of the Great Recession. Apparently the “job creators” were not scared off by Obama’s reelection.

That is the good news. What else does the report tell us about the ongoing Lesser Depression?

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The good news is that this morning the BLS released a report stating that based on the “establishment” survey non-farm payroll increased by 171,000 jobs in October. Most of the job increases were in “Professional and Business Services” (51,000), “Health Care” (31,000), “Retail Trade” (36,000), “Leisure and Hospitality” (28,000), and “Construction” (17,000). “Non-farm payroll” are non-farm workers on payrolls, not including: agricultural workers, the self- employed, unpaid family workers, and private household workers. According to the broader “household” survey which includes all of the categories above, Employment in October increased by 410,000.

The overall Unemployment Rate (UER) (calculated from the “household” survey”) has increased slightly to 7.9% from its September rate of 7.8%, due mostly to a large increase in Black Unemployment from 13.4% in September to 14.3% in October. As the Unemployment Rate is calculated as the share of the Labor Force that is not employed, its level depends on both Employment growth and Labor Force Growth. This increase in the UER indicates that the Labor Force has grown more rapidly than Employment growth, particularly among African-Americans. Though October Employment growth of 410,000 has exceeded average monthly new entrants to the Labor Force (roughly 80,000 to 120,000), UER has increased because previously “discouraged”, “marginally attached”, or “part-time for economic reasons,” workers have re-entered the Labor Force (defined as workers, willing and able to work, who have looked for a job in the last 30 days). Indeed the Labor Force grew in October by 578,000. This is a sign of increased optimism among the unemployed.

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The top line number this morning was the 0.3 percent decline in the unemployment rate – a number that probably generated a huge sigh of relief from the current administration. And it is true that this report, coupled with the previously announced upward revision of the past few months, has exited the stock market. But, once again, the numbers behind the top line number are more significant.

With a labor force of approximately 155,000,000, a 0.3 decline in unemployment should mean job growth of more than 460,000 – but the actual number of jobs created was only 114,000. And, before we get too excited about a number that roughly equals the new entrants into the labor force, it is worth reminding ourselves that it was only a few months ago, in Jan – March 2012, that the monthly new job creation numbers were over 200,000. At that time CPEG raised the question of the pattern of relatively strong job growth tapering off to lower growth into the summer and fall. Turns out we were right.

So, where is everybody?

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