Chart 1 shows more than 1 million jobs have been added over the past year. (click on graph to see larger version)
Chart 2 shows the changes in specific employment categories: manufacturing, service, and government. (click on graph to see larger version)
The announcement by the Bureau of Labor Statistics that employment has grown by 126,000 in October and by nearly as much in September marks the third month of improvement in the employment survey. Particularly noteworthy were employment gains in the service sector of 143,000. In related good news, the unemployment rate fell slightly to 6.0 percent in October from September's 6.1 percent.
What's important about these latest figures is their signal that the economy is well along in its recovery, and it's a strong recovery. Job growth is often the last patch in the economic recovery quilt.
- This is the third straight month of job growth. We're seeing revisions being adjusted dramatically upward as September's employment gains more than doubled from 57,000 to 125,000. October's preliminary numbers are at 126,000 and will be probably be revised upward like previous months.
- Wages and earnings increased at 2.4 percent .
- Remarkable levels of job growth in light of the very high productivity growth. High rates of productivity tend to mean less employment. The fact that productivity and employment numbers are strong point to the strength of the current economy.
- These employment gains come on the heels of a marked drop in new jobless claims. New jobless numbers are at their lowest level since the 2001 recession. October and September employment gains are the highest since January of this year.
- August through October employment gains have erased the jobs losses of June and July.
- There's been a drop in manufacturing jobs, a trend that has been evident for years. But it is good to see a smaller decline of only 24,000 in October. This is much smaller than expected. But the long-term trend will continue and Americans will continually change to service jobs.
Certainly many factors are involved, but critics cannot ignore the fact that the Bush tax cuts are working. They have provided a foundation for bringing the recovery full swing by providing incentives for businesses to expand and invest.
Consumer spending is important and has done much to sustain the economy throughout the recovery. However, the missing link to stronger employment growth has been a robust recovery in investment, which traditionally fuels increases in jobs and wages.
Tax relief has lowered the cost of capital, made existing enterprises more profitable and investment and expansion more attractive. As the economy continues to grow and expand, stronger job performance building on today's news will undoubtedly follow. To ensure the strongest growth Congress should make these tax cuts permanent.