Employment Report Disappoints
Analysts expected the Labor Department to announce that employers added at least 200,000 jobs in September. It didn’t come close.
The Bureau of Labor Statistics on Friday said total nonfarm payroll employment increased by just 142,000 in September, although the unemployment rate remained unchanged at 5.1 percent. Job gains occurred in health care and information, while mining employment fell. Moreover, the labor participation rate fell to a cyclical low and employers pulled back slightly on the average weekly workweek.
BLS revised downward total nonfarm payroll employment for July from +245,000 to +223,000, and revised downward August’s numbers from +173,000 to +136,000. With these revisions, employment gains in July and August combined were 59,000 less than previously reported. Over the past three months, job gains averaged 167,000 per month. Thus far in 2015, job growth averaged 198,000 per month, compared to an average monthly gain of 260,000 in 2014.
Over the past year, the unemployment rate and the number of unemployed persons fell by 0.8 percentage point and 1.3 million, respectively. The civilian labor force participation rate declined to 62.4 percent in September; the rate had been 62.6 percent for the prior three months. The employment-population ratio edged down to 59.2 percent in September, after showing little movement for the first eight months of the year.
The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.5 hours in September. The manufacturing workweek decreased by 0.2 hour to 40.6 hours, while factory overtime declined by 0.2 hour to 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.6 hours.
The report said average hourly earnings for all employees on private nonfarm payrolls, at $25.09, changed little (-1 cent), following a 9-cent gain in August. Hourly earnings rose by 2.2 percent over the year. Average hourly earnings of private-sector production and nonsupervisory employees were unchanged at $21.08 in September.
John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C. said the jobs reports “disappointed” as gains came in less than expected and previous months’ gains revised downward. “The pace of gains has certainly slowed relative to expectations,” he said.
Silvia said the data call to question whether this meets the Federal Reserve’s requirement for some additional improvement in the labor market. “We, and the Fed, are on the bubble–an uncomfortable place that generates continued volatility in economic and financial markets,” he said.
This Week:
—Monday: Institute for Supply Management Non-Manufacturing Index
—Tuesday: MBA Mortgage Credit Availability Index; Trade Balance, Bureau of Economic Analysis
—Wednesday: MBA Weekly Applications Survey; Consumer Credit, Federal Reserve
—Thursday: MBA Builder Applications Survey; Initial Claims, Labor Department
—Friday: Imports/Exports, Bureau of Labor Statistics; Wholesale Trade, Census Bureau
—Monday, Oct. 12: Columbus Day holiday (MBA offices open; MBA NewsLink will publish)
