Jobs are still coming back. But still a long way to go

While many of us spent the last few days going over election results and waiting for networks to confirm what we (AND THEY) all knew to be true (BYE DONNIE!), some serious jobs news came in over recent days.

The first was Thursday's unemployment claims report, which told us that on the week before the election, the trend of claims continued to decline, but the totals weere still high.

In the week ending October 31, the advance figure for seasonally adjusted initial claimswas 751,000, a decrease of 7,000 from the previous week's revised level. The previous week's level was revised up by 7,000 from 751,000 to 758,000. The 4-week moving average was 787,000, a decrease of 4,000 from the previous week's revised average. The previous week's average was revised up by 3,250 from 787,750 to 791,000.

The advance seasonally adjusted insured unemployment ratewas 5.0 percent for the week ending October 24, a decrease of 0.3 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 24 was 7,285,000, a decrease of 538,000 from the previous week's revised level. The previous week's level was revised up 67,000 from 7,756,000 to 7,823,000. The 4-week moving average was 8,244,500, a decrease of 827,250 from the previous week's revised average. The previous week's average was revised up by 18,500 from 9,053,250 to 9,071,750.

It's in the right direction, but still a long way to go before we even get down to the Great Recession peaks of 665,000 new claims and 6,635,000 continuing claims.

Positive news is also in the report when you see that the number of Americans on the contractor-heavy PUA program continues to decline, so the overall number of people collecting unemployment claims is down below 21 million.

However, note the rise in the gray part of that graph. A lot of the recent "decline" in continuing claims simply reflects people having their 26 weeks of regular unemployment run out. Many of those individuals continue to transition to the "extended claims" part of the unemployment program, with the number of people on extended claims rising by more than 2.5 million over the last 5 weeks.

This increase of long-term unemployed was also reflected in Friday's jobs report. You can see the growth in the orange and then gray parts of this graph as we got 15 and then 26 weeks out from the start of COVID-19 breaking out in the country in March.

However, the number of people listed as unemployed in Friday's monthly jobs report continued to fall, and by a significant amount.

In October, the unemployment rate declined by 1.0 percentage point to 6.9 percent, and the number of unemployed persons fell by 1.5 million to 11.1 million. Both measures have declined for 6 consecutive months but are nearly twice their February levels (3.5 percent and 5.8 million, respectively).

This is quite a different number than the 21 million people we still see filing unemployment claims, but the household survey only tells us if those individuals didn't work at all in tbe month of October. And it seems plausible that more people are finding jobs than the number of people stilll being laid off, and that there are at least some people heading back to work after being unemployed.

I thought the payrolls part of the October jobs report was surprisingly good, especially given that many Census jobs ended in that month.

Total nonfarm payroll employment rose by 638,000 in October, and the unemployment rate declined to 6.9 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. In October, notable job gains occurred in leisure and hospitality, professional and business services, retail trade, and construction. Employment in government declined.

Emnployment in government declined by a lot, and not just because of the winding down of Census work. Both higher education (at the state level) and local schools took major hits in October. October jobs change, US
Total jobs +638,000
Private sector jobs +906,000

Government jobs -268,000
Federal Government -138,000
Census -147,000
Other Fed Govt +9,000

State govt -65,000
Education -61,400
Other state govt -3,700

Local govt -65,000
Education -97,800
Other local govt +33,300

Keep that in mind as we get back to talking about policy and stimulus measures in the next few weeks - state and local governments are in big trouble, especially as CARES money runs out at the end of this year.

On the private sector side, the jobs picture continued to (slowly) rebound. But we're still down 8.9 million private sector jobs from where we were pre-COVID, and more than 10 million jobs overall.

A big positive in the report was strong hiring in both construction (+84,000) and manufacturing (+38,000). Both sectors are still below where they were pre-COVID, but they're not as bad as most other parts of the economy, and it helps explain why Trump was able to sell an argument of "improving economy" to a lot of blue-collars (whether it was true or not).

On the service side, there were some good gains in retail trade (+103,700), and bars and restaurants (+192,200). However, bars and restaurant employment is far below its February peak, as are hotels and other accomodations and entertainment/arts-related jobs.

In addition, the seasonally-adjusted "gains" in September and October shown in the last chart actually reflect lower-than-normal layoffs....because those layoffs already happened several months ago.

So on the day where the 2020 election was called for Joe Biden over Donald Trump, it looks like we had a jobs market where gains were still rolling in, but we still were in a massive hole caused by the COVID-19 induced recession, with many sectors still depressed. And with jobless claims remaining high, winter rolling in (the 70-degree weather ends after Monday, I'm afraid), COVID cases continuing to climb, and a whole lot of election-related activity going away, you wonder if October was the last really good jobs report that we'll see for a while.