Jobs Numbers Climb Ahead of Elections

Nov. 3, 2006 — -- If the White House hasn't already hit your inbox -- either work or personal -- with an e-mail touting the lowest unemployment rate since the spring of 2001, you're probably too hard to reach.

Today's jobs report contained some surprises.

The headline number -- 92,000 new jobs added -- was a disappointment, but that was counteracted by massive upward revisions to previous monthly reports.

August's number saw an extra 42,000 jobs added (from 188,000 to 230,000), and September got a healthy 97,000 today (from 51,000 to 148,000).

The real surprise was the gift given to President Bush in the form of an unemployment number of 4.4 percent -- down 0.2 percent from the previous month's number.

That's the lowest unemployment rate since April 2001. Expect the Republicans to loudly beat the drum with this statistic in the coming days -- a sign that people are enjoying the benefits of a good economy under their stewardship.

So, what do today's numbers tell us about the health of the economy?

It's real proof that Americans who want to work are able to find jobs, and companies are adding to their work forces at a relatively healthy pace despite the fact that the Bureau of Labor Statistics can't seem to count them.

But today's report adds to the troubling indications that the Fed might not have done enough to quell inflation.

Wages -- up a hot 0.4 percent in the month measured here -- are shooting up at a speedy pace. That kind of wage growth paired with stagnant productivity makes for a perfect storm of rising prices and lowered dollar purchasing value.

Overall, the numbers released today looked positive, but there are some potentially troubling signs for down the road.

The Fed is going to have to address the stubborn inflation signals (maybe with another rate hike soon) or the markets are going to start doubting their commitment to keeping things under control.

Where did the new jobs come from?

The long-term trends are apparent in this month's report: Jobs where people make things are going away (-60,000) while jobs where people do things are seeing solid growth (+152,000).

The specific helps give detail to that picture.