Employment Situation: Slight Miss, No Major Change in Trend
October 7, 2016
Bottom Line: Payroll Employment rose by 156k in September, compared with market expectations for an increase of 172k. There were modest revisions to the previous two months which subtracted a total of 7k jobs. Relative to most expectations the miss was driven by a loss in public school payrolls (seasonal adjustments can be difficult as schools start in August and September), smaller gains in health services jobs than expected and a surprising loss in leisure and hospitality jobs. Job creation has averaged 192k over the past 3 months vs. the past 12 months average of 204k. The unemployment rate rose, as household employment grew less than the increase in labor force. Both hourly and weekly earnings rose moderately after a slight decline in August. The workweek rose and the 3-month average is now 34.4. Payroll Employment rose by 156k in September, compared with market expectations for an increase of 172k. The prior 2 months were revised, higher in August by 16k and lower in July by 23k. Government jobs FELL by 32k. Consequently, private sector jobs ROSE by 188k. Private education jobs rose by 7k. State and Local education jobs fell by -22k. Overall employmentv is now 1.7% ABOVE its year ago level, Over the past 12 months, 2,447k jobs have been created. The Unemployment Rate ROSE by 0.1 percentage points in September to 5.0%, compared with market expectations for no change to 4.9%. Household employment rose by 354k while the labor force increased by 444k, resulting in an increase in the number of unemployed of 90k. The Labor Force Participation Rate ROSE by 0.1 percentage points to 62.9%. The Employment-Population Ratio ROSE by 0.1 percentage points to 59.8%. Hourly Earnings ROSE by 0.2% in September, below market expectations of 0.3%. Hourly earnings are now 1.7% ABOVE their year ago level. Weekly Earnings also ROSE by 0.5%, the result of the change in hourly earnings and a longer workweek. Weekly earnings are now 2.3% ABOVE their year ago level. The Average Workweek ROSE by 0.1 to 34.4 hours, in line the market consensus at 34.4 hours.
Article by Contingent Macro Advisors