Economy adds 261,000 new jobs in October, U3 unemployment down to 4.1 percent; but remember . . .

I'm not going to complain about 261,000 new jobs in a month. That's a solid number. I'd like to see better and I think that we will see better when 3.0 percent growth becomes the norm and 4.0-to-5.0 percent becomes the definition of a strong month. But for now, heck yeah, 261,000 is good news, even though it's not as much above replacement rates as you might think if you're not considering the growth in the population. The problem when you look at October growth, though, is that it follows a freakish September in which jobs actually dropped by 33,000, which owed pretty much entirely to the hurricanes. The broader trend is excellent regardless, but you have to take into account that some of October's growth is makeup from September. Had September followed the trend, we'd probably have steady but unspectactular growth in October. As it is, at least we can confirm what we suspected about September - that it was a one-time stumbled caused by the storms, and the general upward trend has quickly resumed:

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Total nonfarm payroll employment rose by 261,000 in October, and the unemployment rate edged down to 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment in food services and drinking places increased sharply, mostly offsetting a decline in September that largely reflected the impact of Hurricanes Irma and Harvey. In October, job gains also occurred in professional and business services, manufacturing, and health care. The unemployment rate edged down by 0.1 percentage point to 4.1 percent in October, and the number of unemployed persons decreased by 281,000 to 6.5 million. Since January, the unemployment rate has declined by 0.7 percentage point, and the number of unemployed persons has decreased by 1.1 million. (See table A-1.) Among the major worker groups, the unemployment rates for adult women (3.6 percent) and Whites (3.5 percent) declined in October. The jobless rates for adult men (3.8 percent), teenagers (13.7 percent), Blacks (7.5 percent), Asians (3.1 percent), and Hispanics (4.8 percent) showed little change. In October, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.6 million and accounted for 24.8 percent of the unemployed. (See table A-12.) The labor force participation rate decreased by 0.4 percentage point to 62.7 percent in October but has shown little movement on net over the past 12 months. The employment-population ratio declined by 0.2 percentage point over the month to 60.2 percent, after increasing by 0.3 percentage point in September. The employment-population ratio is up by 0.5 percentage point over the year.

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The decline in the labor participation rate is disappointing, but that's going to take longer to solve. People who have dropped out of the workforce aren't going to come back because of tax cuts or regulatory policy. They're going to come back because their own personal circumstances call for it, and that has to happen one individual at a time. You can encourage the process, though, by removing incentives not to work. Obama gave us a lot of those and Trump needs to work with the GOP Congress to reverse them. Overall, the early results of the Trump economic policies is very encouraging. We're seeing more growth driven by business investment, and more people working. If the corporate tax cut goes through, I expect the result will be a very prosperous 2018. That couldn't come at a better time for a whole host of reasons - for congressional Republicans to be sure, but more importantly for the rest of us.

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