The Bureau of Labor Statistics of the U.S. Department of Labor released the October Employment Situation Summary and the numbers paint a frightening picture of the American economy. Last month the economy shed 240,000 jobs and unemployment rate rose from 6.1 percent to 6.5 percent. The report was the clearest indication that the nation was in the midst of a deep recession despite the fact that the government has yet to declare it. Employment has fallen by 1.2 million jobs in the first eight months of 2008, and over half of that loss has come in the last three months. The total number of unemployed persons increased by 603,000 to 10.1 million.
While the overall unemployment rate was 6.5 percent, Black unemployment was 11.1 percent and Latino unemployment was 8.8 percent; a clear indication that communities of color are being particularly devastated during this economic downturn. Black male unemployment stood at 11.6 percent compared to white males at 5.7 percent, and the unemployment rate for Black women in October was 8.8 percent as compared to white women at 4.9 percent. It is among young adults, age 16 to 19, where the disparities are great. The unemployment rate for Black teenagers in October was 32.4 percent compared to their white peers at 18.5 percent. Though these young people may not be the principal wage earners in their households, for many poor Black households the additional income earned by teenagers does help the family budget.
The Bureau of Labor statistics numbers also paints a gloomy picture of American industry. Over the month of October employment losses continued in manufacturing, construction and some service sectors although health care and mining added jobs.
Manufacturing employment declined by 90,000 jobs over the month, with losses in aerospace (27,000), durable goods (11,000), furniture and related products (10,000), computer and electronic products (4,000) and motor vehicles and parts (9,000) among the sectors hardest hit. The latter is a clear indication of the dire straits of Detroit’s automobile manufacturers as every company has been impacted and their troubles has impacted the supply chain of auto parts suppliers.
Construction employment fell by 49,000 jobs in October, with declines throughout the industry as residential projects have come to a halt. In some cities that saw a boom in construction activity over the last four years, such as New York, projections going forward are bleak despite the fact that some projects have already received financing and a construction timetable has been set.
Jobs in retail trade fell by 38,000 in October with the largest losses among automobile dealerships (20,000) and department stores (18,000). The retail sector’s numbers are of particular concern as the holiday shopping season approaches and retailers needing to end the year strong to avoid deep cuts in their workforce, as well as some retailers facing the possibility of filing bankruptcy if their numbers do not show marked improvement.
The employment services industry lost 51,000 jobs last month; a sure sign that the economy is in trouble. The losses in this sector has picked up considerably in 2008. The average monthly job loss this year has been 37,000 through October while last year monthly job losses in the employment services sector averaged 11,000.
The financial services sector continues to be crushed in this downturn. Last month employment declined by another 24,000 jobs and is down 200,000 jobs since its peak in December 2006.
One positive sign was that employment in health care continued to move in a positive direction in October, gaining 26,000 jobs. Health care employment has grown by 348,000 jobs over the past 12 months. An additional 7,000 jobs were also added in the mining industry in October, a sector that has grown by 246,000 jobs since April 2003.
Last month 1.6 million people were marginally attached to the labor force. These are people who wanted to work and were available and had looked for work sometime in the past 12 months. However, they were not counted among the unemployed because they had not searched for employment in the 4 weeks preceding the Bureau of Labor Statistics survey. There were 273,000 more marginally attached persons in October than 12 months earlier.
Among the marginally attached were 484,000 discouraged workers; these are individuals not currently looking for work because they believe there are no jobs available. The number of discouraged workers was 164,000 higher than a year earlier. The remaining 1.2 million marginally attached had not searched for work due to issues such as school attendance or family responsibilities.
The November Employment Situation Summary is scheduled for release on Friday December 5.