Magazine article Economic Trends

Labor Markets

Magazine article Economic Trends

Labor Markets

Article excerpt

Nonfarm payrolls increased a moderate 92,000 in October, boosted by a net upward revision of 139,000 jobs for August and September. Although October's increase was below expectations, the three-month average of 157,000 was in line with the recent trend.

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Service-providing industries added the most jobs (152,000), led by professional and business services (43,000). Leisure and hospitality (35,000) and government (34,000) were also positive influences. Goods-producing industries continued to trim payrolls, shedding 60,000 jobs in October. Durable and nondurable manufacturing were equally weak and posted a combined net loss of -39,000 jobs. Wood products, motor vehicles, and parts manufacturing were the most seriously affected. The -26,000 job loss in construction (particularly for residential specialty-trade contractors) reflects continuing softness in the home-building and remodeling sectors.

The civilian unemployment rate dropped from 4.6% to 4.4%, the lowest since April 2001. The labor force participation rate held at 66.2% and the employment-to-population ratio edged up to 63.3%.

The Bureau of Labor Statistics noted that revisions to the most recent data are unusually large. For both August and September, firms' late reports on employment levels showed more growth than earlier reports. The growth came predominantly from a few service providers (government; leisure and hospitality; and education and health services); revisions for most other industries were small or even negative.

Labor Market Conditions

                                   Average monthly change
                               (thousands of employees, NAICS)

                                                    Jan.-
                                                    Sept.   Oct.
                               2003   2004   2005    2006   2006

Payroll employment                9    175    165     153     92
  Goods producing               -42     28     22      15    -60
    Construction                 10     26     25      11    -26
    Manufacturing               -51      0     -6       0    -39
      Durable goods             -32      9      1       5    -19
      Nondurable goods          -19     -9     -7      -5    -20
  Service providing              51    147    143     137    152
    Retail trade                 -4     17     13     -11     -4
    Financial activities (a)      7      8     12      15      1
    PBS (b)                      23     40     41      33     43
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