The Employment Situation, October 2007

From MarketWatch: October job growth strongest since May:
“Shaking off fears about weakness in housing and credit, the U.S. economy created 166,000 net jobs in October, the best job growth since May, the Labor Department reported Friday….

The unemployment rate was steady at 4.7% as expected, the government said…..

However, a separate survey of 60,000 households showed a loss of 250,000 workers, the third decline in the past four months.”

The government report shows good job gains, but a separate survey showed that fewer Americans were employed over all last month. Okay!? Don’t miss the “Back Story” interview with economics reporter David Leonhardt to find out how we can have more jobs and less jobs at the same time.

Payrolls grew mainly in the service sector according to the Labor Department report.

The New York Times reports: “Some economists saw distortions in the data. With seasonal adjustment factors removed, nearly half of the gain in private jobs came from an estimate that the Labor Department makes each month about how many jobs were added by new businesses, known as the “birth and death” model. The Labor Department did not actually find evidence of these jobs; it assumed they were created based on historical patterns…. The unemployment rate held steady at 4.7 percent in October, the highest rate since August 2006, but only because the survey found that more people stopped looking for work and were therefore not counted by the government as unemployed.”

The New York Times article also has an excellent graphic on the Labor Market Picture in October.

Here is the Employment Situation Summary for October from the Bureau of Labor Statistics (BLS).

Extra Credit: Explain how the Bureau of Labor Statistics came up with a 4.7%. unemployment rate in October. Use the actual numbers in the Employment Situation Summary to illustrate. Hint: See Figure 6.1 in your e-book. The unemployment rate is calculated by dividing the number of unemployed individuals by the number of people in the labor force and multiplying by 100 If you are the first student to send me an e-mail (kwoodward@saddleback.edu) with the answer, you will be rewarded with two extra credit Discussion Board points. Only two points extra credit per student can be earned in any given week from the blog questions.