last week’s jobs numbers

There were actually two sets of figures published by the Bureau of Labor Statistics.  The Employment Situation report, which is normally released on the first Friday of the month but which was delayed by the government shutdown, and the JOLTS (Job Openings and Labor Turnover Summary) report for August.

The Employment Situation. released on October 22nd, showed the job market as essentially unchanged in September from prior months.  The initial estimate for September was a gain of 148,000 jobs, a bit less than the consensus forecast of domestic economists.  But the survey is accurate only to +/- 100,000.  And my impression is that economists’ estimates are just stabs in the dark, centered around the trend of recent months’ results.  So unchanged is the best characterization, in my view.

Revisions were benign, as well.  July was revised down by 15,000 to +89,000 positions;  August was revised up by 24,000 to 193,000.  The net change, +9,000 jobs, is statistically insignificant.

The JOLTS report for August, published on the 24th, and which I pay somewhat less attention to, wasn’t earthshaking, either.  The economy had 3.9 million unfilled jobs at the end of that month.  That’s about 100,000 more than in July and about a quarter million more than in August 2012.  The fact that more employers are looking to hire–all in the private sector, not government–is a good thing.

There is some controversy surrounding the JOLTS figures, however.  Why is the unemployment rate so high, at 7.2% of the workforce, when there are almost four million unfilled jobs?

One camp thinks factors like mismatches between, say, the location of the jobs and that of the unemployed is a big reason, but that four million is an ok number in a healing economy.  The other, which includes me, thinks that the JOLTS figures are evidence that a good chunk of current unemployment is structural rather than cyclical–caused by a fundamental mismatch between worker skills and job requirements.  If so, the only way the JOLTS number will come down is through retraining programs and changes in education policy from Washington.  Fat chance of either happening.  But if camp #2 is right, current indifference by government risks creating a permanent underclass of chronically unemployed that will be a big long-term problem.

The bottom line:  neither report has major short-term Wall Street implications.

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