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New employment estimates released by the Bureau of Labor Statistics today show that jobs rose by 166,000 in October 2007, continuing a trend of moderate job growth. While the economy created more jobs than it has in recent months, the new jobs figures cannot cover the fundamental weakness of the labor market
Unemployment remained at 4.7 percent, 0.3 percent above last year, and wage growth has been relatively modest, with average hourly earnings failing to keep pace with inflation for the year. Job growth is still weak by historical standards and perhaps most importantly, remains concentrated in just a few industries, particularly healthcare and food services, making future employment growth susceptible to adverse trends in these two sectors of the economy.
The job growth figures for October are slightly above the expectations of most observers, but people’s expectations were low to begin with. Monthly employment growth for the current business cycle, which started in March 2001, averaged 0.7 percent on an annualized basis, or about one-third the job growth of previous business cycles. Employment growth exceeded the average monthly job growth of previous business cycles in only 10 months out of 79 months in the current business cycle, which began in March, 2001. The last such month was March 2006
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