(Nov 20): US job growth picked up in September and the unemployment rate ticked higher, suggesting the labour market showed signs of stabilising before the government shutdown.
Non-farm payrolls increased 119,000 after the prior month was revised to a decline, according to Bureau of Labor Statistics data out Thursday. The unemployment rate ticked up to 4.4%, the highest in nearly four years and reflecting an increase in the size of the labour force.
The September jobs report, originally due Oct 3, was the first major missed data point in the government shutdown. But because BLS had already completed data collection by the time the shutdown began Oct 1, the report is among the first to be published following the reopening.
The September advance was concentrated in healthcare and leisure and hospitality. Manufacturing, transportation and warehousing, and business services showed declines. Private payrolls increased in September by the most in five months.
The dated snapshot, including the 4,000 drop in August payrolls, suggests an uneven US labour market heading into the final quarter of the year. Prior reports had shown anaemic hiring amid a low-hire, low-fire environment. That has since given way to a rash of layoff announcements, exacerbating Americans’ concerns about their job security.
This will be the last jobs report the Federal Reserve sees before its Dec 9-10 meeting, and officials are divided over whether the slowdown in the labour market justifies another interest-rate cut then. Chair Jerome Powell said last month that another reduction in December is “not a foregone conclusion, far from it,” and “many” policymakers in October leaned against cutting rates again, according to the minutes of that gathering.
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Treasury yields declined and S&P 500 futures rose in early trading following the report.
Separate data Thursday showed applications for US unemployment benefits fell to a three-week low in the period ended Nov 15, the Labor Department said. Continuing claims, a proxy for those receiving benefits, climbed to the highest since late 2021.
Cancelled report
See also: US inflation-adjusted earnings growth stalls as job market cools
BLS said Wednesday that the October jobs report, which was due Nov 7, won’t be published. Instead, those payrolls figures will be incorporated into the November report. That’s due Dec 16, after the Fed’s next meeting. Key statistics like the unemployment rate, however, won’t be included.
The survey of households that informs those figures couldn’t be collected due to the record-long government shutdown, and BLS said it can’t gather the data retroactively.
Given the sharp slowdown in immigration seen this year, the household survey can offer a clearer picture of US labour market dynamics. The participation rate — the share of the population that is working or looking for work — increased to a four-month high in September, due to women. The rate for workers age 25-54, also known as prime-age workers, held at a one-year high.
Meanwhile, the number of people working part time for economic reasons declined by the most in a year, while the share of long-term unemployed fell. Permanent job losers rose to the highest since late 2021.
At the same time, the report showed the monthly gain in average hourly earnings was the smallest since June. Economists pay close attention to this metric as a driver of household spending, which has become even more bifurcated with the wealthiest Americans propelling nearly half of total spending.
Looking ahead, while the October payrolls figures will be published, they won’t necessarily offer a clear picture either. Economists expect a sharp decline in government employment as the federal workers who took the administration’s deferred resignation offers formally roll off payrolls.
Uploaded by Magessan Varatharaja
