Uneaten Cake Lurking in Today’s Jobs Report

October’s jobs report contains a delicious surprise for people who detest big government.

Photo by DIETER NAGL/AFP/Getty Images

Matthew Yglesias is on vacation.

Today the Bureau of Labor Statistics announced 204,000 jobs were added to the economy in October, surprising analysts, many of whom anticipated only 120,000. And it comes just after a better-than-expected third quarter, in which GDP grew by 2.8 percent.

Interesting highlights: Leisure and hospitality lead with an increase of 53,000 jobs in October, followed by retail, professional and technical services, manufacturing, and health care employment. Unemployment notched up slightly from 7.2 percent to 7.3 percent. Average hourly earnings have increased 2.2 percent in the past year. August and September nonfarm payroll employment numbers were revised upward by 60,000 jobs.

For people who hate big government, there continues to be uneaten cake: “Federal government employment declined by 12,000 in October,” the BLS said. That makes a 94,000-job drop in the past year.

People looking for a problem will probably focus on the fact that the bulk of those new jobs occurred in low-wage areas. But that’s not enough to make this a bad jobs report. That said, Felix Salmon’s comments over at Reuters are wise on how this report, relative to others, will affect the market: “We’re still in the very heart of good-news-is-bad-news territory, where traders only care about when the famous Taper will begin. The stronger the data, the more worried they become, and the more that stocks and bonds sell off.”

Damned if you QE, damned if you don’t.

Still, according to the Wall Street Journal, if expectations of 120,000 had been accurate, this would have been “the weakest initial job read since March,” which would have served as another justification to push the “Federal Reserve’s taper announcement into 2014.” Of course, there’s still some likelihood of that anyway.

And how did this report deal with the shutdown? First, the BLS’s survey operations were shut down for the duration—from October 1 through October 16—and the BLS delayed release of this report by a week to allow for data collection. Furloughed federal workers, since they were paid at some point in October, were all considered employed.