The September Jobs Report Bombs

The official September jobs report came out today and it was another bust. The U.S. economy created 194,000 net new jobs last month. That was well short of expectations for 500,000. The unemployment rate fell to 4.8%. Wall Street had been expecting 5.1%.

The unemployment rate is lower now than it was during every single month from 1974 through 1996.

The headline number was hurt by a 123,000 decline in government payrolls, while private payrolls increased by 317,000.

The drop in the jobless rate came as the labor force participation rate edged lower, meaning more people who were sidelined during the coronavirus pandemic have returned to the workforce. A more encompassing number that also includes so-called discouraged workers and those holding part-time jobs for economic reasons declined to 8.5%, also a pandemic-era low.

The good news is that wages are rising. Average hourly earnings rose 0.6% last month. Over the last year, average hourly earnings are up 4.6%.

Of course, inflation is still an issue. That reminds me. The price for oil just topped $80 per barrel. That’s the highest since 2014.

Leisure and hospitality again led job creation, adding 74,000 positions, as the unemployment rate for the sector plunged to 7.7% from 9.1%. Professional and business services contributed 60,000 while retail increased by 56,000.

Job gains were spread across a variety of other sectors: Transportation and warehousing (47,000), information (32,000), social assistance (30,000), manufacturing (26,000), construction (22,000) and wholesale trade (17,000).
Local government education jobs fell by 144,000, which may have been due to seasonal adjustments in the numbers, according to Gus Faucher, chief economist at PNC.

The stock market is about flat today.

Posted by on October 8th, 2021 at 12:42 pm


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