September jobs report whiffs: 142,000 jobs added

Before today’s release of the September jobs report, analysts expected to hear moderately good news from the Bureau of Labor Statistics. Reuters noted that economists thought that “US employers likely added jobs at a brisk pace,” and that the consensus pegged the number of jobs added at 203,000. One can debate whether 203K is actually a “brisk pace” — it’s barely above a maintenance level of added jobs — but that debate would be strictly academic this month. The actual September jobs report showed only 142,000 jobs added, a big miss and slightly below a maintenance level:


Total nonfarm payroll employment increased by 142,000 in September, and the unemployment rate was unchanged at 5.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care and information, while mining employment fell.

In September, the unemployment rate held at 5.1 percent, and the number of unemployed persons (7.9 million) changed little. Over the year, the unemployment rate and the number of unemployed persons were down by 0.8 percentage point and 1.3 million, respectively. (See table A-1.) Among the major worker groups, the unemployment rates for adult men (4.7 percent), adult women (4.6 percent), teenagers (16.3 percent), whites (4.4 percent), blacks (9.2 percent), Asians (3.6 percent), and Hispanics (6.4 percent) showed little or no change in September. (See tables A-1, A-2, and A-3.)

The US economy needs to add ~150,000 jobs a month to keep up with population growth at current levels of workforce participation. Arguably, 142K is within the margin of error for that calculation, but it’s on the low end. That’s not even stagnation-level growth; this kind of report at optimum-employment levels would be seen as weak. This BLS chart shows the pattern of job creation over the last two years, and it’s similarly unimpressive:


And we are far from an optimum-employment level. The Household survey shows a drop of employment by 236,000. The number of people not in the labor force jumped by 579,000 in September as well to hit 94.61 million. That is the highest level yet recorded, and it is more than 2 million more than in January of this year. The workforce participation rate hit a new low, too:


The civilian labor force participation rate declined to 62.4 percent in September; the rate had been 62.6 percent for the prior 3 months. The employment-population ratio edged down to 59.2 percent in September, after showing little movement for the first 8 months of the year.

The last time the participation rate was at 62.4% was in October 1977. It’s a 38-year low. Even Jimmy Carter managed to improve on that metric during his presidency. The overall U-3 unemployment number went down to 5.1%, but that depends in large part on the workforce levels remaining constant, and that hasn’t been the case since the beginning of the so-called Obama Recovery (65.7% in June 2009).

By the way, the BLS also revised the last two months’ job figures downward by a combined 59,000 as well. Most of that downward revision was for August, which went from a weak 173K to a flat-out bad 136K. “Over the past 3 months, job gains have averaged 167,000 per month,” the BLS report concludes, which is itself pretty good evidence that none of this is enough to maintain workforce participation and population growth.

So much for “consensus,” eh?

The AP’s Christopher Rugaber, a reliably straightforward economics reporter, doesn’t pull any punches:

U.S. hiring slowed sharply in September, and job gains for July and August were lower than previously thought, a sour note for a labor market that had been steadily improving.

The Labor Department says employers added just 142,000 jobs in September, depressed by job cuts by manufacturers and oil drillers. The unemployment rate remained 5.1 percent, but only because more Americans stopped looking for work and were no longer counted as unemployed.

All told, the proportion of Americans who either have a job or are looking for one fell to a 38-year low.

Average hourly wages also slipped by a penny and have now risen by only 2.2 percent in the past year.


A sour note indeed — or actually, a number of them.

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David Strom 6:00 PM | February 27, 2024