Jobs numbers good or bad? It depends

A banner reading 'Jobs' hangs on thre facade of the U.S. Chamber of Commerce in Washington.

The Bureau of Labor Statistics announced that the U.S. created 103,000 new jobs in the month of September while the national unemployment rate remained elevated at 9.1 percent. And the number of long-unemployed is still frighteningly high.

Still the report revealed both good and bad news. On the positive side of the ledger, the figures soundly beat the pre-report consensus about how many jobs were created in September. And today's report revised upward the terrible numbers from August in which the economy reportedly created zero jobs.

On the downside, manufacturing jobs slipped into negative territory after several months of strong upward movement, and government jobs continued their slide.

We talked to Ellen Zentner, chief U.S. economist at Nomura Securities who says she's reasonably encouraged by the jobs report. Zentner says that it shows the US hasn't slipped into recession. If a downturn was upon us, she says, we'd be losing jobs, not creating them. And she noted one indicator in the report has shown great resilience. It's called the "Diffusion Index" and it tells us the number of industries creating jobs versus the number showing job losses. She says that the index has remained positive throughout the slow and halting recovery.

As for the pre-report consensus that said around 60,000 jobs were created, Zentner says it's probably a matter of pessimism over the August report. She says that the August numbers skewed expectations for September. In fact, she says that the best news today may be that upward revision of last month's report. The revisions show that the economy created 100,000 more jobs in July and August than previously reported. That turned a depressing three-month average job-creation into something much more palatable. And again, it reveals an economy that is not falling into recession.

But she says she has to provide a caveat to her optimism and that's the "dark cloud of Europe." The sovereign debt crisis, she says, looms over the hiring decisions of every U.S. business. In fact, Zentner says, if not for Europe and its economic troubles, the US might be in the middle of a "decent and measurable" recovery.


Also on the show today, a report from the Boston Consulting Group confirms what we all know, that China is still growing like Jack's beanstalk, while the U.S. economy continues to struggle. But with growth comes rising labor costs, and BCG says China's workers could soon price themselves out of the manufacturing market... and price the U.S. back in. The news that there is a silvery, star-and-stripes lining to the cloud of China's ascendency is making the Marketplace Daily Pulse.

About the author

David Brancaccio is the host of Marketplace Morning Report. Follow David on Twitter @DavidBrancaccio

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