Disappointing U.S.
Jobs Report for September
The U.S. Labor
Market Report covering the national employment situation in September showed a
gain of 142,000 nonfarm jobs. The unemployment rate remained unchanged over the
month at 5.1%. The average workweek edged down by 0.1 hour to 34.5 hours, while
the average hourly wage was little changed over the month at $25.09. Over the
year, average hourly earnings were up by 2.2%.
The employer
payroll survey reported that total nonfarm employment in the United States
increased by 142,000 jobs in September. The private sector contributed 118,000
jobs to the September increase, while the public sector added 24,000 jobs. Nearly
every major industry added jobs in monthly terms except mining and logging, and
manufacturing. Compounding the blow of last month’s weak job growth, were
downward revisions to the July and August figures that showed 59,000 fewer jobs
added in those months than previously reported. Over the past three months, job
gains have averaged 167,000 per month. The 2015 year-to-date average monthly
gain is 198,000 compared with 260,000 in 2014.
On
a year-to-year (YTY) basis, U.S. employment expanded by 2.75 million jobs, an
increase of 2.0%. In year-to-year terms, mining and logging was the only
industry to record a decline. The largest YTY gain occurred in professional and
business services with 616,000 jobs added over the year, an increase of 3.2%.
Within this super-sector, professional and technical industries grew by 311,400
jobs (up by 3.7%), while administrative, waste and support services added
251,300 jobs (2.9%). Forty-one percent of the increase in administrative, waste
and support services occurred in temporary employment (103,900 jobs).
Education
and health added 568,000 jobs (2.6%) with most of the gains occurring in health
care and social assistance (599,300 jobs). Employment in the trade,
transportation and utilities sector expanded by 536,000 jobs YTY (2.0%) with
most of the gains occurring in retail trade (314,100 jobs or 2.0%). Leisure and
hospitality grew by 426,000 jobs (2.9%), construction added 205,000 jobs (3.3%)
and financial activities added 147,000 jobs (1.8%).
Turning
to the household survey, in August the unemployment rate held steady at 5.1%,
the lowest since April 2008. The year ago rate was 5.9%. The labor force
participation rate fell again, dropping to 62.4%, a 38-year low. The more
comprehensive U-6 unemployment rate was 10.0% last month, down from the year
ago rate of 11.7% and is now below its 20-year average of 10.7%. The U-6
unemployment rate counts part-time workers who would prefer full-time work and
individuals who would like a job but have given up the search.
Continuing
improvements in the labor market have also helped to bring down the share of
workers how have been jobless for 27 weeks or more. In September, that share
was 26.6%, which was down from August (27.7%) and down from the year ago share
of 31.9%. The long-run average is 25%. Over the past 12 months, the number of
long-term unemployed persons has fallen by 847,000. In addition, the median
duration of unemployment dropped from 13.3 weeks in September of last year to
11.4 weeks last month.
Summary: For the second
month in a row, the pace of job growth slowed compared with earlier in the
year. Some reasons for the recent slowdown in job growth include weakness
overseas, which hurts U.S. exports of services as well as manufacturing;
volatility in the stock market, which makes companies more cautious; and weak
productivity growth, which may lead companies to shed workers to boost
productivity. Even so, wages continue to make modest gains against annual
inflation and, although not as robust as seen in previous month, most
industries posted job gains.
As
much as the Federal Reserve would like to start normalizing short-term interest
rates, this report may lead to some hesitation. At this point, however, the
FOMC is probably more concerned about the global economy and less concerned
about the U.S., which has generally maintained a steady course for quite some
time.
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