By John Byczkowski
The Cincinnati Enquirer
The economy's "jobless" recovery may be no more. Company payrolls jumped in October for the third consecutive month, the U.S. Labor Department reported Friday.
"It looks like the tax cuts of this last summer succeeded in pushing the U.S. economy up to a sustainable growth path," said John Lonski, chief economist at Moody's Investors Service in New York.
The Labor Department reported that the number of jobs grew by 126,000 in October from September. In addition, August's job loss was revised to show a small gain, and September's gain was revised upward, revealing a three-month gain of 286,000 jobs.
That three-month gain would normally occur in one month in a strong recovery. "While these numbers are up, to say you really have the job market firing on all cylinders, you would need even bigger numbers than this," said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh.
Still, Friday's news followed Thursday's report that new unemployment claims hit their lowest level in more than two years. And Hoffman said many industries contributed to October's job gain. "It was a broader base of job growth. That's a plus," he said.
The Labor Department reported that the unemployment rate fell to 6.0 percent in October, from 6.1 percent in September.
But because the difference was within the statistical margin of error, the agency characterized the unemployment rate as "essentially unchanged."
The same goes for the number of unemployed, reported as 8.8 million in October, 1 million more than a year ago.
October's job gains came across a range of industries, including construction, health services and leisure. Manufacturing, however, lost another 24,000 jobs in October, though the rate of decline is slowing.
At best, economists say, the losses in manufacturing will flatten out, but job gains aren't expected soon.
One hopeful sign: Workers are working more hours. The index for private sector hours worked jumped 0.4 percent in October. With hours growing faster than payrolls, "you can only conclude hiring is in the pipeline," Lonski said.
What comes next is uncertain. Hoffman expects about 1 percent job growth over the next year, an addition of 1 million jobs or more. "One percent is not by any means strong, but if you contrast it to the last two years where we've been losing jobs, it's a very nice turnaround," he said.
"It's not large for a recovery, but it would finally mean that the so-called 'jobless' recovery we've been talking about has come to an end."
Lonski is more optimistic. The economy in 2004 is expected to grow at about 4 percent. Over the last decade, when the economy has grown at that rate, new jobs have been created at the rate of 240,000 or more a month, he said. That would add around 2.5 million jobs next year.
Friday's report contained no information about Ohio, but Hoffman said job growth in the state might not be keeping up with the rest of the country.
"Ohio's economy has been very weak. You've certainly taken a hit in manufacturing, and you haven't offset that with other types of jobs," he said.
"So the reality is that Ohio has probably had more of a job loss the eight or nine months than the national trend. It's too early to say whether that's turned around."
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