About 80,000 non-farm jobs were added in the past month, less than the 103,000 the Labor Department reported for September, when the jobless rate stood at 9.1 percent.

Automatic Data Processing, the massive payroll systems company, projected two days ago the economy would add 110,000 private-sector jobs last month. The Department’s own private-sector figures indicate 103,000 private-sector jobs were added to the economy in October.

The Labor Department reports 26,000 government jobs were cut last month, continuing a long trend of payroll squeezes dating back to 2008.

The civilian labor-force participation rate stood at 64.2 percent in October, and the employment-population ratio was little changed at 58.4 percent — meaning jobs were added without more workers giving up on looking for employment opportunities, as has been the case in previous dips in the unemployment report.

Jobless claims have also sloped downward.

Along demographic lines, the jobless rate among Blacks declined slightly to 15.1 percent. Other worker groups saw very little to no changes at all: 8.8 percent of adult men, 8.0 percent of adult women, 11.4 of Hispanics, and 7.3 percent of Asians were unemployed.

The top jobs generators in the economy were in retail, health care, and business services.

Construction shed 20,000 jobs after adding 27,000 in September.

Other factors point to a labor market that marginally improved despite recession fears a month ago. The number of workers holding onto part-time positions because they were unable to find full-time work dropped by 374,000 people to 8.9 million.

The jobs report indicates average hourly wages jumped slightly as well, growing by 5 cents to $23.19 an hour.

The average workweek for all private-sector employees was 34.3 hours; manufacturing workers work more — 40.5 hours.

What explains this odd result? The weekly new unemployment claims skyrocketed the last three weeks to a high of 474,000 last week, more than offsetting the new jobs created. So for the time being, we’re getting very mixed signals from the key economic measurements.

There was no drop in labor force participation, which indicates that this is a real drop in unemployment rather than a fake one. The consensus expectation was for 205,000 new jobs, so this figure beats the predictions by a small margin.

Private-sector employment increased by 201,000 from February to March on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from January 2011 to February 2011 was revised down to 208,000 from the previously reported increase of 217,000.
…
The average monthly increase in employment over the last four months – December through March – has been 211,000, consistent with a gradual if uneven decline in the unemployment rate. This is almost three times the average monthly gain of 74,000 over the preceding four months of August through November.

After months of seeing the unemployment rate go down only because people were exhausting their benefits and no longer counted, we are finally seeing positive job growth. The Bureau of Labor Statistics releases its employment report on Friday and it is expected to show job growth just short of 200,000.

The participation rate has dropped due to the economic problems of the last few years and currently stands at 64.2 percent. The norm prior to that was in the mid-66 percent range. The decline is a result of more people retiring, going on disability or simply giving up on finding a job. He notes that the number of people on Social Security Disability benefits has risen 14 percent since the recession began.

Some of the decline in the participation rate was inevitable over the next couple decades as the baby boomers began to retire, but demographers still expect the rate to go up some as the economy improves — and how far it goes up will help determine how fast the unemployment rate drops.

As I noted yesterday, if the Civilian noninstitutional population (over 16 years old) grows by about 2 million per year – and the participation rate stays flat – the economy will need to add about 100 thousand jobs per month to keep the unemployment rate steady at 8.9%.

If the population grows faster (say 2.5 million per year), and/or the participation rate rises, it could take significantly more jobs per month to hold the unemployment rate steady. As an example, if the working age population grows 2.5 million per year and the participation rate rises to 65% (from 64.2%) over the next two years, the economy will need to add 200 thousand jobs per month to hold the unemployment rate steady.

Of course, we need to do more than hold the unemployment rate steady where it currently is; we need to see that rate go down steadily. February’s jump of 192,000 jobs was a good start, but depending on what happens to the participation rate, it may not even be enough to maintain the current jobless rate.

In the week ending Feb. 26, the advance figure for seasonally adjusted initial claims was 368,000, a decrease of 20,000 from the previous week’s revised figure of 388,000. The 4-week moving average was 388,500, a decrease of 12,750 from the previous week’s revised average of 401,250.

Bill McBride of Calculated Risk notes that this is the first time the four-week average has dropped below 400,000 since July 2008 and says, “There is nothing magical about the 400,000 level, but breaking below 400,000 is a good sign. The sharp drop in weekly claims suggests improvement in the labor market.”

And we have to remember the numbers are grim:

• There are 7.7 million fewer payroll jobs now than before the recession started in December 2007.
• Almost 14 million Americans are unemployed.
• Of those unemployed, 6.2 million have been unemployed for six months or more.
• Another 8.4 million are working part time for economic reasons,
• About 4 million more have left the labor force since the start of the recession (we can see this in the dramatic drop in the labor force participation rate),
• of those who have left the labor force, about 1 million are available for work, but are discouraged and have given up.

A simple calculation: If the economy is adding 125,000 jobs per month (average over two months), it would take over 5 years to add back the 7.7 million lost payroll jobs – and that doesn’t even include population growth. Grim is an understatement.

It still needs to drop lower — and it has to be offset even more by positive job gains — to make a serious dent in the unemployment rate for the right reasons, but the lower the number of initial jobless claims is the easier it is to offset those losses.

The report says there are a total of 9,405,527 people in the United States receiving unemployment insurance, but that number is only about half of the total number of people who are actually unemployed. The other half have already exhausted their unemployment benefits.

In fact, the labor force participation rate dropped to 64.2 percent, the lowest level since the early 1980s. Once someone has exhausted their benefits, they are no longer counted as unemployed and no longer counted as a part of the labor force. So this drop in unemployment that looks like rosy news is actually very bad news for the economy.

But it’s simply not good enough news given the magnitude of the unemployment crisis. About 8.4 million jobs were lost during the recession. The economy needs to gain 100,000 to 125,000 jobs a month to keep up with population growth. The Wall Street Journal notes that this month’s job growth just isn’t fast enough: “The U.S. unemployment rate is unlikely to move much lower if job gains continue only at December’s pace. Even employment gains close to October’s pace (210,000 jobs) would take us into the next decade before seeing the unemployment rate back near 5%.”

The most troubling news is that the number of discouraged workers increased significantly from last year. The amount of discouraged workers — those unemployed but not looking for work within the past month — rose by 389,000 to 1.3 million from December 2009. (Data is only collected on a yearly basis.) That number is not included in the unemployment rate, since those persons are not in the labor force.

Among the unemployed, 44.3 percent of them have been out of work for 27 weeks or more and are counted as long-term unemployed. Despite 2010 being tied for the highest annual unemployment rate since 1948, employers are still wary of hiring people who have not been out of work for long.

Some job growth is better than none, or job losses. But it’s far from a recovery.

Update: The President spoke on the jobs report this morning in Maryland. He called the jobs report “positive,” but said it only “underscores the importance of not letting up on our efforts.”