The latest jobs report may have been controversial, but at least it was good news. The Bureau of Labor Statistics (BLS) announced on November 2 that 171,000 new jobs were created in October. This is higher than the average rate of monthly job creation so far this year, and on top of that, there were significant upward revisions to job creation figures for August and September. The BLS now estimates that 192,000 jobs were created in August (up from the original estimate of 142,000) and that 148,000 jobs were created in September (up from the original estimate of 114,000). The combined strength of these numbers helped pull this year's pace of job creation up to 157,000 jobs per month, compared to 153,000 per month last year.
Why the controversy?
With all this good news on employment, why would there be any controversy? Timing is everything. This employment report happened to be released just days before a presidential election in which jobs were viewed as the single most critical issue. A month earlier, former GE CEO Jack Welch had stirred up controversy by casting doubt on September's employment figures, which showed the unemployment rate dropping below 8 percent for the first time during Barack Obama's presidency. Welch raised the prospect that a politically motivated conspiracy was behind the sudden drop in unemployment by posting on Twitter, "Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers." If numbers released a month before the election could be considered controversial, then it's easy to see why an increase in job growth less than a week before election day was a real lightning rod for conspiracy theories. It should be noted, however, that many commentators found the numbers credible simply because they represented only a moderate improvement in job growth, not an implausible breakthrough. Also, given the election's eventual outcome, it's unclear whether weaker October jobs figures would have swayed the election results significantly anyway.
Potential impact on savings account rates
What matters most is that employment growth is good news for the economy. If more people are going back to work, it helps not only those people, but potentially several other aspects of the economy -- including savings accounts. Extraordinarily low savings account rates have been a function of a persistently slow economy. If job growth is picking up, it may be the beginning of a long process toward seeing savings account rates rise again.
More than the usual caveats
Any discussion of the relationship between job growth and savings account rates has to be accompanied by a number of caveats. For one thing, conspiracy theories aside, monthly employment numbers can be somewhat fluky, so not too much can be discerned from any one reading. Also, there are many steps in the chain reaction that would link faster growth with higher interest rates, so no change is likely to be seen right away. Finally, these numbers deserve one special caveat. The October employment readings do not reflect the impact of Hurricane Sandy, which struck at the very end of the month. That storm could have a very dramatic -- and potentially negative -- impact on the next round of employment numbers.