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U.S. September non farm payrolls were much lower at 134,000 then the expected 185,000, but the net revision was 87,000 more jobs. Unemployment fell to 48 year lows. Wages continued to rise. We are still digesting the effect trade wars on jobs with tensions affecting employers.


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The market expected the September employment report released this Friday to see nonfarm payrolls rise in line with longer-run trends in monthly employment growth at a consensus of 185,000 new jobs. Logic suggested a return to the mean after the volatility in the hiring data, with strong February hiring offset by weakness in March, April and July also disappointing. The wages data makes it more certain the FOMC plan to raise two more times into 2019. Unemployment remained at a 48 year low on lower participation and the two month NFP revision was 87,000 more jobs.

September U.S. Employment Report

US Jobs Sept 2018
Employment:

  • June non-farm payrolls +201K vs +185K expected, Prior 201K (revised to 254K)
  • Unemployment rate 3.7% vs 3.8% expected
  • Participation rate 62.7% vs 62.7% prior
  • Underemployment rate 7.5% vs 7.5% prior
  • Two month net revision -50K
  • Private payrolls +121K vs 180K expected 

Wages:

  • Average hourly earnings +2.8% y/y vs 2.8% exp, Prior  2.9% y/y
  • Average hourly earnings +0.3% m/m vs +0.3% m/m exp
  • Hours worked 34.5 vs 34.5 expected Prior hours worked 34.5 

 US Jobs Sep 2018 Earnings by Industry

 

Household Survey Data

The unemployment rate declined by 0.2 percentage point to 3.7 percent in September, and the number of unemployed persons decreased by 270,000 to 6.0 million. Over the year, the unemployment rate and the number of unemployed persons declined by 0.5 percentage point and 795,000, respectively. 

Among the major worker groups, the unemployment rates for adult women (3.3 percent) and Whites (3.3 percent) declined in September. The jobless rates for adult men (3.4 percent), teenagers (12.8 percent), Blacks (6.0 percent), Asians (3.5 percent), and Hispanics (4.5 percent) showed little or no change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.4 million over the month; these individuals accounted for 22.9 percent of the unemployed.

In September, the labor force participation rate remained at 62.7 percent, and the employmentpopulation ratio, at 60.4 percent, was little changed.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 263,000 to 4.6 million in September. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

In September, 1.6 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (Data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 383,000 discouraged workers in September, about unchanged from a year earlier. (Data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.2 million persons marginally attached to the labor force in September had not searched for work for reasons such as school attendance or family responsibilities. 

 US Jobs Sep 2018. Industry

Establishment Survey Data

Total nonfarm payroll employment rose by 134,000 in September, compared with an average monthly gain of 201,000 over the prior 12 months. In September, job gains occurred in professional and business services, in health care, and in transportation and warehousing.

Employment in professional and business services increased by 54,000 in September and has risen by 560,000 over the year. Health care employment rose by 26,000 in September. Hospitals added 12,000 jobs, and employment in ambulatory health care services continued to trend up (+10,000). Over the year, health care employment has increased by 302,000.

In September, employment in transportation and warehousing rose by 24,000. Job gains occurred in warehousing and storage (+8,000) and in couriers and messengers (+5,000). Over the year, employment in transportation and warehousing has increased by 174,000. Construction employment continued to trend up in September (+23,000). The industry has added 315,000 jobs over the past 12 months.

Employment in manufacturing continued to trend up in September (+18,000), reflecting a gain in durable goods industries. Over the year, manufacturing has added 278,000 jobs, with about four-fifths of the gain in the durable goods component. Within mining, employment in support activities for mining rose by 6,000 over the month and by 53,000 over the year.

Employment in leisure and hospitality was little changed over the month (-17,000). Prior to September, employment in the industry had been on a modest upward trend. Some of the weakness in this industry in September may reflect the impact of Hurricane Florence. Employment showed little or no change over the month in other major industries, including wholesale trade, retail trade, information, financial activities, and government.

The average workweek for all employees on private nonfarm payrolls remained unchanged at 34.5 hours in September. In manufacturing, the workweek edged down by 0.1 hour to 40.8 hours, and overtime edged down by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

In September, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $27.24. Over the year, average hourly earnings have increased by 73 cents, or 2.8 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $22.81 in September.

The change in total nonfarm payroll employment for July was revised up from +147,000 to +165,000, and the change for August was revised up from +201,000 to +270,000. With these revisions, employment gains in July and August combined were 87,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 190,000 per month over the last 3 months.

The Employment Situation for October is scheduled to be released on Friday, November 2, 2018, at 8:30 a.m. (EDT).

Source: AFP, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

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