Chart
1 shows more than 1 million jobs have been added over the
past year. (click on graph to see larger version)
Chart
2 shows the changes in specific employment categories:
manufacturing, service, and government. (click on graph to see
larger version)
The announcement
by the Bureau of Labor Statistics that employment has grown by
126,000 in October and by nearly as much in September marks the
third month of improvement in the employment survey. Particularly
noteworthy were employment gains in the service sector of 143,000.
In related good news, the unemployment rate fell slightly to 6.0
percent in October from September's 6.1 percent.
What's important
about these latest figures is their signal that the economy is well
along in its recovery, and it's a strong recovery. Job growth is
often the last patch in the economic recovery quilt.
Additional
analysis:
- This is the third
straight month of job growth. We're seeing revisions being adjusted
dramatically upward as September's employment gains more than
doubled from 57,000 to 125,000. October's preliminary numbers are
at 126,000 and will be probably be revised upward like previous
months.
- Wages and
earnings increased at 2.4 percent .
- Remarkable levels
of job growth in light of the very high productivity growth. High
rates of productivity tend to mean less employment. The fact that
productivity and employment numbers are strong point to the
strength of the current economy.
- These employment
gains come on the heels of a marked drop in new jobless claims. New
jobless numbers are at their lowest level since the 2001 recession.
October and September employment gains are the highest since
January of this year.
- August through
October employment gains have erased the jobs losses of June and
July.
- There's been a
drop in manufacturing jobs, a trend that has been evident for
years. But it is good to see a smaller decline of only 24,000 in
October. This is much smaller than expected. But the long-term
trend will continue and Americans will continually change to
service jobs.
Make Tax
Cuts Permanent
Certainly many factors are involved, but critics cannot
ignore the fact that the Bush tax cuts are working. They have
provided a foundation for bringing the recovery full swing by
providing incentives for businesses to expand and invest.
Consumer spending
is important and has done much to sustain the economy throughout
the recovery. However, the missing link to stronger employment
growth has been a robust recovery in investment, which
traditionally fuels increases in jobs and wages.
Tax relief has
lowered the cost of capital, made existing enterprises more
profitable and investment and expansion more attractive. As the
economy continues to grow and expand, stronger job performance
building on today's news will undoubtedly follow. To ensure the
strongest growth Congress should make these tax cuts
permanent.