U.S. job growth slow but steady

The nation added 103,000 new nonfarm jobs in September, according to the latest report from the U. S. Bureau of Labor Statistics. Almost as important as the September employment increase was the size of the recent revisions that now put the average monthly gain for the third quarter at 96,000 jobs, similar to the average monthly 97,000 jobs added during the second quarter. Taken as a whole, job growth during the past six months continues a pattern of slow but steady positive economic expansion.

The nation added 103,000 new nonfarm jobs in September, according to the latest report from the U. S. Bureau of Labor Statistics (BLS). This was the best monthly increase since last April when employment grew by 217,000 jobs (see table). Analysts had been expecting gains of about 60,000, so the increase was (relatively) good news. Although the number of new jobs beats expectations, it was still below the 125,000 or so required just to absorb new entrants into the labor force, over the longer term. And, the new jobs were insufficient to affect the unemployment rate, unchanged at 9.1 percent for September. Almost as important as the September employment increase was the size of the revision for August, a month originally thought to have had no employment gains at all. The earlier headlines decrying zero job growth were off the mark by 57,000 jobs, according to the revised figures from BLS. July was also revised, to 127,000 new jobs, up from the preliminary estimate of 85,000.

Table 1: Monthly Growth in U.S. Jobs (thousands)

Source: U.S. Bureau of Labor Statistics, seasonally adjusted nonfarm jobs

The revisions now put the average monthly gain for the third quarter at 96,000 jobs, similar to the average monthly 97,000 jobs added during the second quarter. Taken as a whole, job growth during the past six months continues a pattern of slow but steady positive expansion. The economy added 48,000 professional and business service jobs in September. Health care grew by 43,800. Government employment continued to be a drag on the economy, down by 34,000 jobs in September. Local government employment fell by 24,400.

Jobs up by 1.4 million over-the-year

September nonfarm employment was up by 1,462,000 jobs compared to September of 2010. The over-the-year growth figures have increased each month since a low of 906,000 in May (see table).

Table 2: Monthly Year-Over-Year Growth in U.S. Jobs (thousands)

Source: U.S. BLS, not-seasonally adjusted nonfarm jobs

In the current U. S. economy, there are 132 million nonfarm jobs (not seasonally adjusted). Of these, 22 million (17 percent) are in the government sector, and 110 million (83 percent) are private jobs. Over the past 12 months, private sector jobs have increased by 1,789,000 (up by 1.7 percent) while government jobs are down by 327,000 (decrease of 1.5 percent). The largest component of government jobs is made up of 13.8 million local jobs. In the past 12 months, 243,000 local government jobs were lost, and since September of 2008, 568,000 local jobs have been eliminated.

Year to date growth is approaching one percent

Annual employment for any year is computed by averaging the monthly employment levels for the entire 12 months of the year. A running indicator of the ultimate annual growth figure is the year-to-date approach to measuring employment gains. As of May of 2011, for example, employment was up by 0.89 percent over the same period of the previous year (see table).

Table 3: Monthly Year-to-Date Growth in U.S. Jobs (percentage)

Source: U.S. BLS, not-seasonally adjusted nonfarm jobs

Now, based on three quarters of job growth data, it appears that U. S. nonfarm employment might increase as much as one percent for the year. It seems evident that 2011 will be the first year of positive job growth since 2007, when employment grew by 1.1 percent.