The employment data published last week had some important statistics.
Net job gains totaled 165,000 in October, according to the Labor Department, far more than economists had expected. The August and September data were revised upward by a total of 84,000, reinforcing the story of 3.4% GDP growth in the third quarter that ended September 30.
Labor-force participation rose while the unemployment rate dropped to 4.1% from 4.2%.
These statistics can be useful, but they’d be much more useful were important context-providing statistics, along with their meanings, also published in the jobs reports. [F]ar more than economists had expected illustrates how useless “economists'” expectations are on immediate data. No “expectations” can be counted reliable when they’re based on badly incomplete data, and the data informing jobs reports are badly incomplete on the initial collection—see the two-month lag in getting complete enough data to comment on—form an expectation about—jobs data.
Beyond that, there are two important statistics, Critical Items for me, that clarify the meaning of the unemployment rate number. One of them is the labor-force participation rate blithely glossed over in this house editorial. This rate came in at 61.9% for October, meaning that of all the folks of working age, 61.9% of them were actually interested in getting a job or have one. That’s the snapshot. The better datum is the trend. Since June 2026, seasonally adjusted (which smooths out a lot of noise), this rate has risen slowly but steadily from June’s 61.5%. More folks who could work are actively seeking or are finding jobs. An even longer trend—reaching back 10 years—is available here. The current short-term trend, while encouraging, remains below that long-term trend. We may be recovering, finally, but it’s a bit early to draw that conclusion. Or expectation. Data reaching back to 1950 are available here.
The other statistic is the employment-population ratio. This statistic compares the number of folks who actually have jobs—that subset of the labor-force participation ratio—came in at 59.3% for October. This, too, is a snapshot; the trend since June 2026 has been growth from June’s 59.0%, with a brief downward excursion in July that was more than recovered from in August. Graphs showing the employment-population ratio reaching back to 1950 indicate that the current ratio is consistent with the historical trend; although it’s considerably below the period 1983-2008
These context statistics indicate that the employment component in our economy is sound and improving, or recovering well, depending on perspective.
Of course, a horsefly in this ointment, also mentioned by the editors, is wage growth not keeping up with, much less exceeding, the inflation rate. Americans’ real wages have been falling, meaning our ability to buy stuff like food and fuel or to pay our rent/mortgages and utility bills has been shrinking. Don’t look for government tax and spending increases to correct this.