October 2015 Jobs Report Will Bring Small Yet Meaningful Improvements

Originally published on November 5, 2015.

Friday will give the nation its first official glimpse of the Labor Department’s jobs and unemployment report for October 2015. After two months of sluggish growth at home and a volatile summer abroad, many are looking to this report for reassurance that the US economy is healthy and continuing to recover from 2007’s downturn.

Though one shouldn’t expect tremendous improvement, October’s figures should offer some solace. Most economists are forecasting that the unemployment rate will be 5.0%, a small decrease from September’s 5.1%. While this number in itself is not tremendously exciting, it is part of a larger picture of steady decline from a rate of 5.7% in January 2015. Additionally, the unemployment rate is half of what it was six years ago, when it peaked at 10.0% in October 2009.

The number of non-farm payrolls added is where the report should get more interesting. Recently surveyed economists expect 190,000 jobs to be added in October after two disappointing months. September saw a paltry 142,000 jobs added, surprising most analysts, who had predicted that 203,000 new jobs would be created. To make matters worse, this was in the wake of a disappointing August report as well — just 136,000 jobs were created, a number revised down from the originally reported 173,000 jobs.

While 190,000 new jobs would be a welcome departure from August and September, October will likely see less growth than the rest of 2015. The Labor Department reported that as of September, the average growth was 198,000 new jobs per month. In contrast, 2014 averaged 260,000 new jobs per month. Though numbers as high as these likely won’t be seen, October will hopefully be the start of a sustained upswing.

October’s jobs and unemployment report is of special interest as the end of the year approaches, and as speculation of when the Federal Reserve will raise interest rates increases. The Fed has held the interest rate at a near-zero level since June 2006, prior to 2007’s recession. Many cite August’s lackluster report as the reason why the Fed decided not raise rates at their September meeting. The New York Times gloomily predicted that September’s numbers only lengthened this delay. However, depending on what tomorrow’s report brings, the Fed could raise rates by the year’s end.