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  • Writer's pictureNick Andriacchi

U.S. Job Market Surprises with Strong September Employment Report

Autumn tends to be a favorite of all the seasons! Temperate weather, leaves changing and for staffers – the most robust quarter of the year.

The September jobs report was really robust and smashed expectations, with upward revisions to July and August.


Net gain of 90,000 people entered the workforce.


· Employment in temporary help services continued to trend down (-4,300)


· Average hourly earnings rose 0.2% for the month, good for a 4.2% annual pace.


· Employment continued to trend up in healthcare, leisure and hospitality, education.


· The JOLTS report estimates that there are 9.6 mm open jobs, up from July. Quits held steady as employees have become more reluctant to change jobs.

Analysis of September Employment Report


This is great news for those looking for work. Maybe not so great for taming inflation and the Fed policy designed to do so (rapidly rising interest rates).


In terms of interest rates, the Fed has reason(s) to continue its pause.


· Wage growth slowed last month (4.2%), probably due to the bigger jump in the hospitality industry.


· Speaking of the hospitality industry, employment is back to its pre-pandemic level.

· More people continue to enter the talent force, which should help ease inflation in general.


· Bond yields are up, which may help the do the Fed’s bidding.


· Temp help (traditionally a leading employment indicator) was down yet again. This sector has been soft all year.


My point is that inflation was a product of people and company's being paid not to produce. The more people that enter (or re-enter) the workforce, the less inflationary pressures.





· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons is down to 7.0%.


· Prime age labor force participation rate (ages 25-54) was down .1% to 80.8%.


· The overall labor force participation was unchanged at 62.8%. This is encouraging and just .4% below the level of February 2020.


· In September, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents, or 0.2 percent, to $33.88. Over the past 12 months, average hourly earnings have increased by 4.2 percent. In September, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents, or 0.2 percent, to $29.06.


· The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in September. In manufacturing, the average workweek was little changed at 40.1 hours, and overtime was unchanged at 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.8 hours.


· APD is reported that only 89,000 jobs were added last month. They also reported a steady decline in wages.


Source: ADP, BLS, CNBC, Fox News



JOB OPENINGS AND LABOR TURNOVER – August 2023


The number of job openings increased to 9.6 million on the last business day of August, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 5.9 million and 5.7 million, respectively. Within separations, quits (3.6 million) and layoffs and

discharges (1.7 million) changed little. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class.

Job Openings


On the last business day of August, the number and rate of job openings increased to 9.6 million (+690,000) and 5.8 percent, respectively. Over the month, job openings increased in professional and business services (+509,000), finance and insurance (+96,000), state and local government education (+76,000), nondurable goods manufacturing (+59,000), and federal government (+31,000).


Hires


In August, the number of hires changed little at 5.9 million and the rate was unchanged at 3.7 percent. The number of hires changed little in all industries.


Separations


Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. The quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations include separations due to retirement, death, disability, and transfers to other locations of the same firm.


The number of total separations in August was little changed at 5.7 million, and the rate was unchanged at 3.6 percent. Over the month, the number of total separations increased in accommodation and food services (+105,000) but decreased in information (-41,000) and federal government (-8,000).


In August, the number of quits changed little at 3.6 million and the rate was unchanged at 2.3 percent. The number of quits increased in accommodation and food services (+88,000); finance and insurance (+28,000); state and local government, excluding education (+21,000); and arts, entertainment, and recreation (+18,000). The number of quits decreased in information (-30,000).


In August, the number of layoffs and discharges changed little at 1.7 million, and the rate held at 1.1 percent. The number of layoffs and discharges decreased in state and local government, excluding education (-39,000), but increased in state and local government education (+27,000).


The number of other separations was little changed in August at 357,000.


Establishment Size Class


In August, the layoffs and discharges rate for establishments with 1 to 9 employees decreased. Job openings, hires, and total separations rates were little changed for establishments with 5,000 or more employees.

____________

The Job Openings and Labor Turnover Survey estimates for September 2023 are scheduled to be released on Wednesday, November 1, 2023, at 10:00 a.m. (ET).

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