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Seeing gray in the economy cloud

Amy Scott Nov 3, 2006

KAI RYSSDAL: It’s not a stellar number, in and of itself. The economy added 92,000 new jobs in October. But the Bureau of Labor Statistics also went back and did its math again. The jobs reports for August and September were revised upward. By a lot. And the unemployment rate, a measure of how many people are out there looking for work, fell to just 4.4 percent. That’s the lowest its been in five years. Take the long view, factor in all the economic reports out this week and, Marketplace’s Amy Scott reports, some economists are finding the cloud around that silver lining.

AMY SCOTT: After lackluster reports on everything from GDP growth to manufacturing to worker productivity, Nigel Gault welcomed a little good news. He’s an economist at the research firm Global Insight. Gault says most expected the economy to add more than 92,000 jobs last month.

NIGEL GAULT: But at the same time, the number of jobs created in both August and September was revised up quite sharply from the preliminary figures. So if you add them all together, we’ve actually been doing better over the last few months than we thought.

Health care and other service jobs fared especially well. But construction and other housing-related jobs fell by 33,000 last month. Factories lost 39,000 positions.

Jared Bernstein is with the Economic Policy Institute, a think tank funded by labor unions. Bernstein says when you exclude government work, the private sector added just 58,000 jobs last month. That’s the worst performance in a year.

JARED BERNSTEIN: There is enough in this report, both in terms of slowing job growth, in terms of some of the problematic sectors like housing, to lead you to believe that the slowing economy is gonna start showing up in the job market in coming months.

As for the unemployment rate hitting a five-year low, Bernstein says it might be a little off. It’s based on a notoriously volatile household survey which showed the economy created 437,000 new jobs last month.

Bernstein says the only people who believe that number are running for office.

In New York, I’m Amy Scott for Marketplace.

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