South By North Strategies, Ltd.

CHAPEL HILL (November 5, 2010) – The national employment picture changed little in October. Last month, employers added 151,000 more payroll positions than they cut. The unemployment rate, meanwhile, held steady at 9.6 percent due in part to the exiting of 254,000 people from the labor force.

“The October employment report offered little evidence that a robust recovery is underway,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “While payroll employment rose due to private-sector hiring, positions simply are not being added at the pace needed to bring down joblessness anytime soon.”

In October, the nation’s employers added 151,000 more payroll positions than they cut. Gains occurred primarily in the private sector (+159,000), while government payrolls fell by 8,000 positions owing to job reductions among local governments. Additionally, the payroll employment numbers for August and September were revised upwards; with the revisions, the economy lost 42,000 jobs over those two months rather than the 152,000 positions previously reported.

Private-sector gains in October occurred in professional and businesses services (+46,000, primarily in the temporary help services sub-industry), education and health services (+53,000), retail trade (+28,000), and other services (+25,000). Private-sector losses occurred in manufacturing (-7,000), and leisure and hospitality services (-5,000). All other private-industry groups experienced little or no change in October.

“The October employment is a reminder that job growth is not occurring at the level needed to accommodate all of the Americans who wish to work,” noted Quinterno. “The current pace of growth will not put a dent in the problem of joblessness anytime soon.”

Weak conditions were reflected in the October household survey. Last month, 14.8 million Americans (9.6 percent of the labor force) were jobless and seeking work. Proportionally more adult male workers were unemployed than female ones (9.7 percent vs. 8.1 percent). Similarly, unemployment rates were higher among Black (15.7 percent) and Hispanic workers (12.6 percent) than among White ones (8.8 percent). The unemployment rate among teenagers was 27.1 percent. Unemployment rates for most of these categories changed only slightly from the previous month.

Furthermore, newly available data show that 8.3 percent of all veterans were unemployed in October; the rate among veterans who had served since September 2001 was 10.6 percent.

“There remains a tremendous amount of idle labor in the American economy,” added Quinterno. “Compared to a year ago, a smaller share of the civilian population is participating in the labor force. The proportion of the population that is underemployed also has risen. In October, the underemployment rate equaled 17 percent, down slightly from 17.1 percent in September.”

Jobs remained difficult to find in October. Last month, 41.8 percent of unemployed workers had been jobless for at least six months with the average spell of unemployment lasting for 33.9 weeks. The number of people marginally attached to the labor force rose in October, while the number working part time for economic reasons fell.

“Two aspects of the October employment report merit particular attention,” observed Quinterno. “First, the pace of job growth remains too tepid to reverse the problem of widespread joblessness. Second, weak job creation is leading people to abandon the labor market. In fact, over 200,000 Americans have left the labor force just since August. This is an alarming development with serious consequences for households, businesses, and communities, to say nothing of the larger project of economic recovery.”