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October jobs report: ‘Significant’ decline in labor participation obscures drop in unemployment rate

As teens return to school and more Baby Boomers enter retirement, a marked decline in labor participation has offset job gains from September.
By Ramona Schindelheim
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Is the U.S. job market humming along in high gear?

There’s no clear answer in October’s mixed employment numbers. The economy added 261,000 jobs last month, according to the Bureau of Labor Statistics report released today, not quite the bounce-back from September’s hurricane-impacted numbers economists were looking for. And while the headline-grabbing unemployment rate fell to 4.1%, the reason has some economists worried.

RELATED STORY: September jobs numbers down following hurricanes

First the gains. 89,000 new food service and bar workers were added to the payrolls in October, almost offsetting the 98,000 jobs lost in September when Hurricanes Harvey and Irma shut down businesses in the South. Professional and business services added 50,000 workers last month, which is in line with the average monthly gains over the past year.

Photo – WZDX, Huntsville, Ala.

Manufacturing added 24,000 jobs, well above the 14,000-a-month average we’ve seen since the sector hit a recent employment low in November 2016. Healthcare jobs were up 22,000 in October. So far, in 2017, healthcare has averaged gains of 24,000 jobs, compared with an average gain of 32,000 per month in 2016.

The unemployment rate, at 4.1%, was the lowest since December 2000. But average hourly earnings were flat, and the year-over-year pace reflects the return to the workforce of low-wage workers.

The October report also shows that labor force participation was significantly lower for teens and women, a number that has economist Diane Swonk of DS Economics in Chicago concerned about the overall health of the job market.

“This is a critical issue,” says Swonk, “as participation in the labor force among prime-age workers needs to rise if we hope to offset the drag associated with the aging of baby boomers and the curbs to both legal and illegal immigration.”

The civilian labor force participation rate in 2017. Source – Bureau of Labor Statistics

 

Keeping America’s Promise

As we approach Veterans Day, it’s a good time to look at how America is doing when it comes to employing the men and women who have served in the military. There is good news in the October number. The overall unemployment rate for vets ticked down to 2.7% in October, a 16-year low.

Again, this is good news. But, as we learned at our recent “Keeping America’s Promise” Town Hall in Dallas, there are underlying problems that we need to address when it comes to making sure that veterans have meaningful jobs after they leave the service. Underemployment is a key issue.

Retired Gen. George Casey Jr. discussed solutions to getting veterans civilian jobs at the WorkingNation/Hiring America Town Hall on Nov. 25 in Dallas. Photo – Jonathan Barenboim

Gen. George Casey (Ret.), the former U.S. Army Chief of Staff spoke on the issue at the WorkingNation Town Hall. He said that 300,000 vets are underemployed and both veterans and hiring managers have to do their part to address the problem.

RELATED STORY: August jobs report: Labor market fizzles as veterans sit underemployed

Gen. Casey said that military men and women come from a job in the service that gives them a huge sense of worth, rebuilding another country, for example. He told us that when the veteran moves into the civilian workforce “they need jobs that give them a sense of purpose and pride.”

He urged hiring managers to take the time to understand that a veteran can bring a lot to a business, especially when it comes to “soft skills” like communication and leadership. When you ask CEOs what they want in an employee, according to Gen. Casey, it sounds a lot like the men and women who have served in the military.

“We want good work ethic. We want strong values. We want the ability to solve problems. We want the ability to work as a member of a team,” said Gen. Casey. He also called on veterans to value those skills they learned in the military: “You’ve already got the skills that business leaders are looking for. Don’t sell yourself short.”

Join the Conversation: What are your thoughts on the latest BLS numbers? Have your say on our Facebook page.

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Dana Beth Ardi

Executive Committee

Dana Beth Ardi, PhD, Executive Committee, is a thought leader and expert in the fields of executive search, talent management, organizational design, assessment, leadership and coaching. As an innovator in the human capital movement, Ardi creates enhanced value in companies by matching the most sought after talent with the best opportunities. Ardi coaches boards and investors on the art and science of building high caliber management teams. She provides them with the necessary skills to seek out and attract top-level management, to design the ideal organizational architectures and to deploy people against strategy. Ardi unearths the way a business works and the most effective way for people to work in them.

Ardi is an experienced business executive and senior consultant who leverages business organizational transformation through talent strategies. She uses her knowledge and experience to develop talent strategies to enhance revenue and profit contributions. She has a deep expertise in change management and organizational effectiveness and has designed and built high performance cultures. Ardi has significant experience in mergers, acquisitions, divestitures, IPO’s and turnarounds.

Ardi is an expert on the multi-generational workforce. She understands the four intersecting generations of workers coming together in contemporary companies, each with their own mindsets, leadership and communications styles, values and motivations. Ardi is sought after to assist companies manage and thrive by bringing the generations together. Her book, Fall of the Alphas: How Beta Leaders Win Through Connection, Collaboration and Influence, will be published by St. Martin’s Press. The book reflects Ardi’s deep expertise in understanding organizations and our changing society. It focuses on building a winning culture, how companies must grow and evolve, and how talent influences and shapes communities of work. This is what she has coined “Corporate Anthropology.” It is a playbook on how modern companies must meet challenges – culturally, globally, digitally, across genders and generations.

Ardi is currently the Managing Director and Founder of Corporate Anthropology Advisors, LLC, a consulting company that provides human capital advisory and innovative solutions to companies building value through people. Corporate Anthropology works with organizations, their cultures, the way they grow and develop, and the people who are responsible for forming their communities of work.

Prior to her position at Corporate Anthropology Advisors, Ardi served as a Partner/Managing Director at the private equity firms CCMP Capital and JPMorgan Partners. She was a partner at Flatiron Partners, a venture capital firm working with early state companies where she pioneered the human capital role within an investment portfolio.

Ardi holds a BS from the State University of New York at Buffalo as well as a Masters degree and PhD from Boston College. She started her career as professor at the Graduate Center at Fordham University in New York.

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