Job creation below expectations, but unemployment rose
U.S. September Nonfarm Payrolls: 156,000
Expectation: 168,000
What drove the increase:
Job gains were seen in professional and business services ( 67,000) and health care ( 33,000) during September. Health care jobs have risen 445,000 over the year.
Retail trade employment saw another increase of 22,000 jobs, mostly in clothing and clothing accessories (14,000).
Food services job growth was put at 30,000 for September and marked a rise of 300,000 over the year.
Perhaps importantly, the mining sector – where the oil industry is categorized – saw steady conditions after having lost some 220,000 jobs after peaking in September 2014.
September Unemployment: 5.0 percent
Expectation: 4.8 percent
What drove the increase:
The number of unemployed persons was at 7.9 million, little changed for the month.
The number of persons unemployed less than 5 weeks increased by 284,000 to 2.6 million in September. The level of long-term unemployed was at 2.0 million and accounted for 24.9 percent of those unemployed.
The number of persons employed part time for economic reasons was little changed in September at 5.9 million.
In September, 1.8 million persons were marginally attached to the labor force, about unchanged from a year earlier.
The labor force participation rate ticked higher, moving up to 62.9 percent after being at 62.8 percent in both July and August.
Other highlights:
The average workweek rose by 0.1 hour to 34.4 hours in September.
Wages also rose, with average hourly earnings up 6 cents to $25.79 per hour, up 2.6 percent from September 2015.
Revisions to prior months included July revised down to 252,000 (275,000 previously) while August was revised up to 167,000 (151,000 previously) for a net decline of 7,000 jobs.
Comments: The report was under expectations, but still signals a solid jobs market as we move into the final quarter of 2016. Job creation has averaged 178,000 so far in 2016, down from the level of 229,000 per month in 2015.
This won’t likely shift thinking on the Fed a great deal and likely means December remains the focal point for any rate increase by the U.S. central bank. It’s not far enough below expectations to cause an alarm for the Fed and there still appears to be a pool of workers that are not in the labor force given the still-low labor-force participation rate.
Markets appear to have reached the conclusion that the Fed won’t raise rates before December. Gold futures have lifted higher, the 10-year US Treasury note yield is just above 1.72 percent and the U.S. dollar index has swung to being weaker.
We may get some additional views on the jobs data via four Fed speakers on tap today: Vice Chair Stanley Fischer, Gov. Lael Brainard, KC Fed President Esther George and Cleveland Fed President Loretta Mester. Both Mester and George are on record as pushing for higher rates now while Fischer appears to be leaning that direction but Brainard has signaled caution on raising rates.
“
