Article Attachment

The attached file contains this articles commentary as well as tables and charts of the data.

Employment Situation: Surprise Drop Amid Hurricane Impacts

October 6, 2017

Bottom Line: Payroll Employment fell by 33k in September, compared with market expectations for an increase of 80k as the leisure and hospitality industry shed 111k jobs amid three major hurricanes. There were modest revisions to the previous two months which subtracted a total of 38k jobs.

The household survey of employment showed a huge jump in employment, which relative to the payroll survey showed just how difficult the hurricanes made the government's tallying of jobs. The unemployment rate dropped, as household employment grew more than the increase in labor force.

Hourly earnings rose moderately after a modest increase in August. Weekly earnings rose 0.45%. The workweek was unchanged and the 3-month average is now 34.4.

Overall, looking through the hurricane impacts, the trend in labor markets remains solid, if modestly slower than in the prior few years.

Payroll Employment fell by 33k in September, compared with market expectations for an increase of 80k. The prior 2 months were revised, higher in August by 13k and lower in July by 51k.

Government jobs ROSE by 7k. Consequently, private sector jobs FELL by 40k. Private education jobs rose by 14k. State and Local education jobs rose by 5k. Overall employment is now 1.2% ABOVE its year ago level,

Over the past 12 months, 1,777k jobs have been created. In September, the job gains were in:

  • Trade, Transportation & Utilities (+29k with -3k of those in Retail Trade),
  • Professional & Business Services (+13k with the addition of 5.9k in Temp Help Services),
  • Education & Health Services (+13k),
  • Financial Activities (+10k),
  • Construction (+8k),
  • Government (+7k),

Jobs were shed in Information (-9k), and Leisure & Hospitality (-111k).

The Unemployment Rate FELL by 0.2 percentage points in September to 4.2%, compared with market expectations for a no change to 4.4%.

Household employment rose by 906k while the labor force increased by 575k, resulting in a decrease in the number of unemployed of 331k.

The Labor Force Participation Rate ROSE by 0.2 percentage points to 63.1%. The Employment-Population Ratio ROSE by 0.3 percentage points to 60.4%.

The number of people Working Part-Time for Economic Reasons FELL by 147k to 5,032k. while Long-Term Unemployment FELL by 7k to 1,733k (accounting for 25.5% of the unemployed), while the Mean Duration of Unemployment ROSE by 2.4 weeks to 26.8 weeks.

There are now 6.8 million people officially unemployed. In addition, there are another 5,628k people who say they want a job but are not currently looking for one. Finally, another 5,032k people are working part-time because of slack economic conditions.

Hourly Earnings ROSE by 0.5% in September, above market expectations of 0.3%. Hourly earnings are now 2.9% ABOVE their year ago level.

Weekly Earnings also ROSE by 0.5%, the result of the change in hourly earnings and a steady workweek. Weekly earnings are now 2.9% ABOVE their year ago level.

The Average Workweek was UNCHANGED at 34.4 hours, BELOW the market consensus at 34.5 hours.

Article by Contingent Macro Advisors