The midterm elections are over and the holiday season is approaching, so attention is shifting back to the economy and, in particular, the employment picture moving toward 2015.
On Friday, the Department of Labor capped off a busy week of releases on job trends in October and, for the most part, the numbers were encouraging.
The report showed an increase in payrolls last month of 214,000.
Most impressive, it was the ninth month in a row that payrolls have increased by more than 200,000, a streak that hasn’t been seen since 1994. In addition, reports for August and September were revised to show an additional 31,000 jobs, and the unemployment rate fell to 5.8 percent.
“The job market is steadily picking up pace,” said Mark Zandi, an economist with Moody’s Analytics. “Job growth is strong and broad-based across industries and company sizes. At this pace of job growth, unemployment and underemployment is quickly declining. The job market will soon be tight enough to support a meaningful acceleration in wage growth.”
However, the October report shows wage growth is rather anemic. The Department of Labor report said hourly pay rose just 0.1 percent in October to $24.57 and has increased just 2.0 percent in the past 12 months.
The unemployment rate in San Diego County continues to decline with better-than-expected job growth. The unemployment rate in September, the most recent reporting period, was 5.9 percent. The region’s economy has created 33,000 in the past 12 months, above most expectations.
The Manpower employment report issued by the San Diego Regional Economic Development Corporation suggests the local economy is performing well so far in 2014.
“San Diego’s key driving industries have had an outstanding year, at least in terms of job growth, and the region has continued to add middle- to high-paying jobs in industries like manufacturing, construction and services,” the Manpower report says.
As has historically been the case, small- and medium-size businesses are the real job creators as the local and national economies climb out of the Great Recession.
The ADP National Employment Report issued last Wednesday showed an increase of 230,000 jobs in the private sector.
Of those jobs, only 5,000 were added by large businesses with more than 500 employees. The bulk of the jobs were created by small businesses — fewer than 50 employees — and medium-size companies with 50 to 500 workers.
While the recent jobs reports have been encouraging, there is still plenty of room for improvement to return to prerecession levels.
“While a vast improvement from days past when the economy was shedding 700,000 to 800,000 jobs on a monthly basis, relativity can only be applauded for so long,” said Lindsey Piegza, chief economist at Sterne Agee. “At some point, the economy will need outright strength in hiring to justify weaning off extreme Fed accommodation.”