The jobs report released this morning by the Bureau of Labor Statistics showed the labor market gained 204,000 jobs in October, along with an upward revision of 60,000 to prior months’ data, bringing the average growth rate of the last year to 194,000. There appears to be no discernible impact on the payroll numbers of the partial government shutdown in October; in the payroll survey federal employees on furlough during the partial government shutdown were still considered employed. Importantly, the labor force participation rate dropped 0.4 percentage points to its lowest point of the downturn, 62.8%. The unemployment rate was little changed in October, ticking up slightly to 7.3%. The partial government shutdown may have played a role in the unemployment numbers, since federal employees on furlough during the partial government shutdown should have been counted as unemployed on temporary layoff in the household survey.

While 204,000 new jobs is a better number than we have seen recently, the month-to-month signal is potentially murky. At a time like this it’s useful to step back and take stock of the larger picture. The larger picture, however, is grim. We need 8.0 million jobs to get back to the pre-recession unemployment rate, and at the average rate of growth of the last 12 months, that won’t happen for another five years. The unemployment rate has improved substantially from its peak exactly four years ago of 10% in October 2009. However, most of that improvement was not for good reasons, it was due to the growth in the number of “missing workers”—people who have dropped out of, or never entered, the labor market because jobs opportunities are so weak. There are currently roughly 6.1 million missing workers, and if these workers were in the labor force looking for work, the unemployment rate would be 10.8 percent instead of 7.3 percent.