Employers Add 156,000 September Jobs; Unemployment Rate Rises
The unemployment rate ticked up in September–but that’s not such a bad thing, as it turns out.
The Bureau of Labor Statistics on Friday said total nonfarm payroll employment increased by 156,000 in September, mostly in professional and business services and in health care. BLS revised down July’s numbers from 275,000 to 252,000 and revised August’s numbers up from 151,000 to 167,000. Over the past three months, job gains averaged 192,000 per month. For the year so far, job growth averaged 178,000, compared to 229,000 per month in 2015.
The unemployment rate ticked up to 5.0 percent from 4.9 percent. But the labor participation rate edged up by a tenth of 1 percent to 62.9 percent, suggesting that more Americans got off the sidelines and began looking for work again. John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C., said this was a “good sign” for the economy.
“September job gains of 156,000 support the outlook for a 2 percent growth trend in the economy along with an [Federal Open Market Committee] move to raise the funds rate in December,” Silvia said. “These gains are consistent with solid consumer spending and housing/construction improvements in the second half of 2016.”
BLS said the average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.4 hours in September. In manufacturing, the workweek increased by 0.1 hour to 40.7 hours, while ertime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.5 hours.
The report also noted average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $25.79. Over the year, average hourly earnings have risen by 2.6 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $21.68 in September.
“One sign of tightening in the labor market is the gradual pick-up in average hourly earnings with the unemployment rate near estimates of full employment,” Silvia said. “Average hourly earnings rose 0.2 percent in September, putting the year-over-year gain at 2.6 percent. This pace of wage inflation would still support a FOMC move to raise the funds rate in December, but is not enough to support a more aggressive set of moves in 2017 at a pace above the path indicated in the dot plot. Upward wage gains will put upward pressure on unit labor costs and thereby inflation and downward pressure on profits, even with more modest gains in the labor market.”
