U.S. Employment increases by 254,000 jobs in September
KEY TAKEAWAY:According to the Bureau of Labor Statistics' (BLS) most recent report, employment in the U.S. increased by 254,000 in September 2024, defying the expectations that U.S. has entered a phase of sub-par employment growth. The unemployment rate fell slightly to 4.1%.
Employment
In Brief: August’s report appeared to establish the downturn in the labor market that we had been anticipating. The September results along with revisions for the previous two months portray a different direction for employment. Job creation in September was the highest it has been since March. Employment has accelerated in every month since June while real wages have increased every month over the same period. These point to an economy picking up steam, not softening.
Diving in: The previous two jobs reports could dramatically change our assessment of the labor market. Similarly, a jobs report for October showing slow job growth and major revised downgrades for August and September could lead to many dismissing the impressive results in this report and returning to the conclusion that the labor market is weakening.
Unemployment
The Big Picture: The U-6 unemployment rate, which includes discouraged, underemployed, and unemployed workers in the country, fell to 7.7% in September. The U-3 unemployment rate, which indicates only the number of unemployed people actively seeking a job, decreased to 4.1%.
What Does This Mean?: A declining U-3 unemployment rate with a steady labor force participation rate is a good sign that those who are looking for work are more able to find it. The larger decrease in the U-6 unemployment rate indicates that more workers who have been underemployed are getting jobs better suited to their qualifications.
The employment numbers above reflect the seasonally adjusted, monthly change in non-farm jobs.
The unemployment rate measures the percentage of the labor force that is currently without a job. The national unemployment rate has remained steady throughout 2023 and now into 2024, fluctuating between 3.7% and 4.1%.
U-3 unemployment rate is the most commonly reported rate in the United States, representing the number of unemployed people actively seeking a job. The U-6 rate covers discouraged, underemployed, and unemployed workers in the country.
The labor force participation rate is an estimate of an economy’s active workforce. YTD the U.S. labor force participation rate ranged between a low of 62.5% and a high of 62.8%, according to the U.S. Bureau of Labor Statistics.
How We Matched Up
Geographic Solutions: Geographic Solutions' expectations of 123,000 jobs were well short of the 254,000 jobs added in September. The unemployment rate expectation of 4.3% was above the 4.1% result.
The Wall Street Journal: The Wall Street Journal's expectation of 150,000 jobs being added to the labor market was also far below what was recorded in the labor market report. The unemployment rate forecast of 4.2% was slightly above.
ADP: According to ADP’s latest estimate, the private sector added 143,000 jobs in August, compared to the 223,000 reported by the BLS.
Key Takeaway: While Private Education & Health Services added the highest number of jobs in August (81,000) it was about even with its average job growth over the previous 12 months (75,000). The best performances compared to their recent histories were in Leisure & Hospitality (78,000), outperforming its 12-month average by 54,000.
Why: Employment in food services and drinking places (restaurants and bars) has sharply increased over the last two months, and it made up more than 88%of all job creation in Leisure & Hospitality for September.
Stock Down: Information and Public Sector
Key Takeaway: The Manufacturing Sector was down this past month with 7,000 jobs lost. The Public Sector disappointed with only 31,000 jobs for the month when its 12-month average was 41,000.
Why: Job declines within Manufacturing were most severe in transportation equipment manufacturing (-5,200). Employment in the federal government was flat, weighing down the public sector. Both sectors were the only major ones to experience employment growth that was below their sectors’ averages over the previous 12 months.
Will job creation remain robust over the coming months?
Based on the numbers from the latest report, we anticipate employment growth will slow down but will continue to add jobs at a slower pace in the coming months. This indicates that businesses are still looking to expand but more gradually.
Do workers or employers have more power in the labor market?
Neither side has a definitive upper hand, but it appears that the decline in unfilled job openings is giving employers more influence in the job market.
How has the labor market shifted since March 2023?
The labor market has continued to add jobs without slowing down despite widespread expectations of a recession.
Geographic Solutions derives its employment forecast and unemployment rate forecast from internal data on the number of job openings, searchers, and employment and unemployment applications filed on Geographic Solutions' state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).
Are you enjoying Phillip Sprehe’s insights and analysis? Interested in having him speak or provide content for podcast, television, internet, or other mediums? Please email us using this form.
.gif "Econ Corner Title Graphics - September 2024 (1)")
.gif "Econ Corner - August 2024 (1)")
.gif "Meet the Economist_Econ Corner (5)")
