BLS: 254,000 Jobs Added in September
(Image courtesy of Bureau of Labor Statistics)
The Bureau of Labor Statistics announced 254,000 jobs were added in September, with the unemployment level still relatively flat at 4.1%.
Jobs were specifically added in food services and drinking places, health care, government, social assistance and construction.
The change in total nonfarm payroll employment for July and August were both revised up–July by 55,000, from 89,000 to 144,000. August was revised up by 17,000, from 142,000 to 159,000.
“Across every dimension, the September employment report showed a job market that was stronger than expected. Job growth exceeded expectations with a 254,000 gain for the month, and the prior two months’ data were revised upwards by a cumulative 72,000 gain. The unemployment rate dropped from 4.2% in August to 4.1% in September. Additionally, wage growth re-accelerated to 4%,” said MBA SVP and Chief Economist Mike Fratantoni. “All of these signs point toward a successful ‘soft landing,’ but also stoke worries that inflation may not move in a straight line to the Fed’s 2% target. This report could certainly slow the expected pace of rate cuts.”
“Interest rates jumped on the release of this report. MBA’s forecast is for longer-term rates, including mortgage rates, to remain within a relatively narrow range over the next year. This news will push mortgage rates to the top of that range, but we do expect that mortgage rates will stay close to 6% over the next 12 months,” Fratantoni continued.
Fratantoni also noted that the gains were concentrated in a few industries–including food service. Those gains may not be here to stay if consumers pull back on spending at restaurants and similar establishments.
“The September jobs report offers an encouraging sign that labor market conditions are stabilizing, but we are not quite ready to declare victory over the shaky labor market data that pushed the FOMC to cut the fed funds rate by 50 bps two weeks ago,” wrote Wells Fargo Economists Sarah House and Michael Pugliese. “Demand for new workers has turned to merely lukewarm, as indicated by the downward trend in job openings, contractionary PMI employment readings, drop in small business hiring plans and faltering consumer perceptions of job availability. Fortunately, layoffs remain low, but an upturn could lead to a further downshift in net payroll growth with firms reluctant to take on new workers.”
“A stronger-than-expected labor market report may put some upward pressure on mortgage rates, which could be discouraging for buyers, sellers and builders,” said First American Deputy Chief Economist Odeta Kushi. “However, a resilient labor market is essential for both the housing market and the broader economy.”
“The residential construction labor market continued to trend higher and remains resilient,” she continued. “The Job Openings and Labor Turnover Survey (JOLTS) from earlier this week showed a surprise increase in the number of job openings, driven in large part by new construction job openings. This could be a sign that the construction industry is beginning to retool in anticipation of lower construction financing costs, which could begin to offset some of the substantial increase in construction material prices that have occurred over the last four years.”
