The Bureau of Labor Statistics shattered expert predictions on Friday, reporting that the economy added 250,000 new jobs in the month of October. The labor force participation rate also climbed, unemployment stayed at a record low, and the number of employed Americans stands at a record high.
The economy saw gains in crucial sectors like manufacturing (+32,000 jobs), construction (+30,000 jobs), transportation and warehousing (+25,000 jobs), leisure and hospitality (+42,000 jobs), professional and business services (+35,000 jobs), and mining (+5,000 jobs).
The previous month’s report showed the lowest unemployment rate since 1969, and this month, that number was unchanged. Hispanic unemployment has also reached a historic low of 4.4 percent.
Unemployment also showed little or no change for adult men (3.5 percent), adult women (3.4 percent), teenagers (11.9 percent), whites (3.3 percent), blacks (6.2 percent), and Asians (3.2 percent).
Adding to the good news, the labor force participation rate jumped from 62.7 percent to 62.9 percent. This means that an additional 711,000 people got off the sidelines and jumped back into the workforce. This is surely welcome news for employers, given the recent report that there are currently 7.1 million open jobs in America without people to fill them.
In addition, wages continued to slowly rise with average hourly earnings increasing by 5 cents to $27.30. Over the past year, average hourly earnings have risen by a total of 83 cents, or 3.1 percent. This is a big positive for workers, and many say it reflects a tight labor market, forcing employers to offer higher pay and benefits to fill open positions.
This is all fantastic news. But we should also be aware that things are not perfect.
A new report released Thursday suggests that worker productivity is not keeping pace with the strength of the economy. We also see from the jobs report that the number of people marginally attached to the workforce (the long-term unemployed) and discouraged workers were essentially unchanged from September.
This means that the gains we see today are vulnerable to reversal and require vigilant protection and encouragement from policymakers in Washington.
Congress should make last year’s tax cuts permanent and pursue other good policies, like creating universal savings accounts. The president should continue to slash regulations that strangle businesses, and both Congress and the president should embrace free trade policies that don’t impose needless tax hikes on businesses and everyday Americans.
Most importantly, now is the time to place spending on the chopping block and reduce the debt by putting our fiscal house in order. We must develop long-term solutions that ensure America remains prosperous so that we continue to see positive jobs reports. Without controlling spending, any of the policies mentioned above are an exercise in futility.