October Employment Report

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the October employment report.

• This employment report is a good one, with 171,000 net new payroll jobs in October. There was a slight upward revision to past months' data. In the past 12 months, 1.9 million net new payroll jobs have been created.
• According to the household survey (asking people directly if they have a job rather than tallying up company payroll figures) there were 410,000 net new jobs and 3.1 million over the past 12 months. Many independent contractor jobs show up in this household survey, but not in payroll data. REALTORS®, for example, generally are not on anyone’s payroll.
• The unemployment rate, which is based on the household survey, ticked up one notch to 7.9 percent. There was an increase in the number of people entering the workforce searching for jobs in the past month. Still, the labor force participation rate has fallen dramatically in recent years as people entered schools, dropped out of the labor force or qualified for disability benefits.
• The average hourly wage was $19.79 in the past month, which is an increase of 1.1 percent over the past 12 months. Consumer prices have been rising faster (2.0 percent as of September), so the wage growth is not keeping pace with inflation.
• The total number of unemployed and underemployed is trending down but remains elevated. Accounting for population growth and constant flow of college and high school graduates, net new jobs need to be about 250,000 every month for the next 8 years to bring us back to a normal 5 percent unemployment rate.
• For those keeping score for political reasons, there have been 195,000 net new payroll jobs total from January 2009 to October 2012. By household data, a net of 1.2 million more jobs today versus January 2009.
• The bottom line nonetheless is that there are jobs being added to the economy. That is the source of housing demand and commercial occupancy demand. There are better times ahead for real estate practitioners.