Today’s update on October’s employment status is neither surprising nor encouraging. The U.S. economy is still bleeding jobs, but that’s hardly shocking at this point. It’s been clear for some time now that the risk of a jobless recovery is high.
Nonfarm payrolls shed another 190,000 positions last month, a modestly lower pace than September’s 219,000 loss but still far away from anything suggesting stabilization in the labor force much less growth. Most of the job destruction came in the goods producing industries, although the services sector managed to shrink by 61,000 jobs in October. The conspicuous points of light were education and health services (a rise 45,000 jobs) and professional and business services (+18,000). But on balance, there’s nothing to cheer in today’s employment report other than to recognize that the pace of decline overall is considerably lower than it was during the height of the financial crisis late last year and early in 2009. Slim pickings after nearly two years of labor-market contraction.
The good news is that the magic level of zero job loss is coming, and perhaps soon. If we’re lucky, it’ll arrive before the year is out, although our guess at this point is that the first quarter of next year is a more likely forecast. Rest assured, stability in the labor market is near. Short of some new cataclysmic change in the current economic profile, the stars are aligned for an end to the job destruction that has been nonstop since January 2008. Alas, the bigger problem is not ending the job destruction; rather, the bigger challenge will be minting new jobs.