Adam Ozimek, chief economist at Upwork
The labor market continues to head in the right direction, as the BLS reported today that employers added 128,000 jobs in October. Despite being below average for the recovery, this number is actually good news given the multiple temporary factors clouding the report this month.The first blip this month’s report faced was the exclusion of around 48,000 jobs caused by the GM employees who were on strike. In addition, the end of work for temporary Census hires subtracted another 20,000. Understanding that these two factors are temporary, in actuality, the underlying pace of growth should have been closer to a healthy 196,000.The second thing to consider, the past two months of job gains have been revised up significantly, adding a total of 95,000 jobs. Altogether, the average pace of job growth for the last three months is now 176,000. Remove the effects of the GM strike, and the three month average is an even more impressive 192,000. Combined with the significant upward revisions, this month’s jobs report should help calm recession fears. Although one report should never move the needle too much, the story remains largely consistent: the economy has continued to improve, albeit at a slower pace than last year thanks to headwinds from trade and lagging repercussions from the Fed raising rates too fast and too soon.Perhaps the most important news in the report this month is that the best measure of cyclical slack, the share of prime working age adults with jobs, has surpassed pre-recession levels. While post-recession period has been filled with commentary and concerns that many workers were structurally unemployed, this is the best signal to-date that this view of the labor market was too pessimistic. We have not seen a permanent change, instead we have seen a slow recovery from a serious recession. This data should finally convince the pessimists it is time to stop underestimating workers.The truth is recession fears have always been overblown and even 109 months into the recovery, the labor market still has room to improve. And all signs suggest this slow recovery is still underway.
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