First Friday of the Month

Unemployment rate

And the monthly jobs report is not great. 

Non farm payroll rose well under then natural growth rate of the workforce, and the unemployment rate rose by 0.1% to 4.2% while workforce participation rose marginally. 

The U.S. added just 29,000 jobs in September, a sign that the labor market may not be able to deliver the sizable gains that it did in the past—but doesn’t need to in order to keep the unemployment rate low.

The numbers

The jobs number, reported Friday by the Labor Department, fell far short of analysts’ expectations for an increase of 84,000 jobs. The unemployment rate edged up to 4.2%. That was higher than 4.1% the previous month but still at a historically low level that indicates the labor market remains generally healthy.

Monthly employment numbers can be volatile, so investors and policymakers tend to focus on the unemployment rate. 

Low hire, low fire

The 29,000 number will seem low to anyone who remembers the job gains that routinely topped 200,000 in the years before the pandemic—much less the massive job gains that came when the economy reopened from Covid-19.

But the economy doesn’t need to generate as many jobs as it used to just to keep the labor market steady. The population is aging, and an immigration clampdown has reduced growth in the supply of workers. 

In a positive sign, what is called the labor-force participation rate—the share of people working or looking for work—inched up slightly. “That all speaks to continued strength in the labor market,” said Kathy Bostjancic, chief economist at Nationwide.

The job market remains in a low-hire, low-fire era that provides stability but can be frustrating for Americans used to more opportunity. That dynamic has made it harder for newcomers to break into the job market, or for those who have been laid off or seeking new jobs to find new roles.

And some of the other bits.

………

Stock investors cheered the report, with stocks up across a broad range of sectors. Investors also dialed back their expectations for a rate increase this month.

Still, the report lands amid a broad selloff in the bond market, and Treasury yields rose. They hit their highest level in 24 years earlier this week before retreating, while mortgage rates have surged above 7%. 

So, a bad jobs report is good news at the big casino on Wall Street.  ¯\_(ツ)_/¯

……… 

Jobs numbers for both July and August were revised down. Employers shed 10,000 jobs in July, down from a previous estimate of a gain of 21,000. August’s job gain was revised to 133,000, from 162,000. Combined, revisions trimmed 60,000 jobs from the previously estimated tally for July and August.

 So the numbers are even worse than they initially appear.