The number of jobs on establishment payrolls fell by 240,000 in October, and the unemployment rate rose from 6.1 to 6.5 percent. October's drop in payroll employment followed declines of 127,000 in August and 284,000 in September, as revised. Employment has fallen by 1.2 million in the first 10 months of 2008; over half of the decrease has occurred in the past 3 months.
BLS, the agency that issues the Employment Situation, started chacterizing employment as trending down with the release of March data (and stopped referring to employment trending up with the release of November 2007 data). However, if one looks more broadly at the labor market, signs of softening could be seen somewhat earlier. A proprietary composite index of five broad labor market indicators peaked in October 2006 and could have been recognized as having turned down by the first few months of 2007.
Our labor market index fell 2.1 percent in October to 88.0 (2007=100). All five components of the index contributed to the decline. The unemployment rate was the largest downward influence on the index, followed in order by the portion of the labor force unemployed 15 weeks or more, goods-producing employment, the employment-to-population ratio, and the index of aggregate weekly hours.
The Employment Situation for November 2008 is scheduled to be released on Friday, December 5. (BLS)
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