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U.S. Added 134,000 Jobs in September; Unemployment at 3.7%
(35 minutes later)
The Labor Department will release its official hiring and unemployment figures for September at 8:30 a.m. on Friday, providing the latest snapshot of the American economy.
The Labor Department released its official hiring and unemployment figures for September on Friday, providing the latest snapshot of the American economy.
Economists expect the report to show that employers added about 168,000 jobs last month. That would be a modest slowdown from the 201,000 jobs added in August, but would nonetheless represent another solid month in what is already a record streak of growth.
■ 134,000 jobs were added last month. Wall Street economists had expected an increase of about 168,000, according to MarketWatch.
Here’s what you should watch for:
■ The unemployment rate was 3.7 percent. August’s jobless rate was 3.9 percent.
Last month marked the 10th anniversary of the collapse of Lehman Brothers and the start of the financial crisis. Employers cut 443,000 jobs in September 2008, and slashed seven million more in the months that followed.
■ Average earnings rose by 8 cents an hour and are up 2.8 percent over the past year.
The labor market has experienced a remarkable rebound since then. Barring a big surprise in Friday’s report, September will be the 96th consecutive month of job growth — eight straight years, double the previous record. The unemployment rate, at 3.9 percent in August, is near a two-decade low, and may have fallen further in September. African-Americans, Latinos and other groups that often face discrimination are experiencing some of their lowest rates of joblessness on record.
September marked the 10th anniversary of the collapse of Lehman Brothers and the start of the financial crisis. It also represented a milestone in the remarkable rebound that followed: eight straight years of monthly job growth, double the previous record.
Many economists wonder how long the good times can last. With unemployment this low, employers are being forced to work harder and dig deeper into the labor pool to find workers. That’s good news for people trying to find jobs, but policymakers at the Federal Reserve are watching nervously for signs that the economy is “overheating” — that is, that the tight labor market and strong economy are sowing the seeds for faster inflation down the road.
By nearly any measure, today’s labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. The unemployment rate is close to a two-decade low. Job growth has repeatedly defied economists’ predictions of a slowdown. African-Americans, Latinos and other groups that often face discrimination are experiencing some of their lowest rates of joblessness on record.
So far, there isn’t much evidence of that happening. Wage growth has edged up in recent months but only gradually, and inflation remains tame. The Fed raised interest rates last month as expected, but has thus far been content to move slowly — Chairman Jerome Powell this week said the economy was good but “not too good to be true.”
“I view this as the strongest labor market in a generation,” said Andrew Chamberlain, chief economist at the career site Glassdoor. “These really are the good times.”
Friday’s figures could be hard to interpret because of the impact of Hurricane Florence, which hit the Carolinas in the middle of the month. Natural disasters can affect employment data in various ways: interfering with data collection, disrupting hiring and putting people temporarily out of work as businesses shutter and residents evacuate.
Those good times, however, have not yet translated into robust pay gains for many workers. The slow pace of wage growth has been a persistent source of disappointment in the recovery, and economists have long looked for evidence that the tight labor market is at last forcing companies to hand out raises.
“We are seeing some acceleration in average hourly earnings, maybe not as much as we would expect given how tight labor markets are,” said Ben Herzon, an economist for Macroeconomic Advisers.
The long-awaited pickup may already have begun. Amazon announced this week that it would raise wages for all its employees in the United States to at least $15 an hour.
But while faster wage growth would be good news for workers, it could worry policymakers at the Federal Reserve, who are watching for signs that the economy is “overheating” — that is, that the tight labor market and strong economy are sowing the seeds for faster inflation down the road. If those concerns mount, the Fed might raise interest rates more quickly than planned, which could bring the recovery to an end.
So far, there isn’t much evidence of that happening. The Fed raised interest rates last month as expected, but has thus far been content to move slowly. Jerome Powell, the Fed chairman, said this week that the economy was good but “not too good to be true.”
Take extra care interpreting September’s jobs figures because of Hurricane Florence, which hit the Carolinas in the middle of the month. Natural disasters can affect employment numbers in various ways: interfering with data collection, disrupting hiring and putting people temporarily out of work as businesses shutter and residents evacuate.
Last year, the storms that hit Florida and Texas wreaked havoc on September’s employment data. The government’s initial report showed an unexpected net loss of jobs for the month; that figure was later revised up to show a tiny gain. Roughly 1.5 million people reported being unable to work because of the weather.
Last year, the storms that hit Florida and Texas wreaked havoc on September’s employment data. The government’s initial report showed an unexpected net loss of jobs for the month; that figure was later revised up to show a tiny gain. Roughly 1.5 million people reported being unable to work because of the weather.
This year, the impact will most likely be more modest. Florence affected a smaller part of the country than last year’s storms, and hit at a time in the month when it is less likely to disrupt data collection or measurement. Still, the storm could affect measures of earnings and working hours.
This year, the impact was probably more modest. Florence affected a smaller part of the country than last year’s storms, and hit at a time in the month when it is less likely to disrupt data collection or measurement. Still, the storm may have muddied measures of earnings and working hours.
“The big question is how much of an influence is Florence going to have,” said Dan North, chief economist for North America at Euler Hermes, an insurer. “People were evacuating, so people weren’t on the payrolls. We’re talking about a pretty large swath of population there.”
Friday’s report is one of the last major economic releases before November’s midterm elections. The next round of jobs data will come four days before Election Day, by which point most voters’ minds may be made up.
Friday’s report is one of the last major economic releases before the midterm elections in November. The next round of jobs data will come four days before Election Day, by which point most voters’ minds may be made up.
Republicans are counting on the strong economy to help hold off a potential “blue wave” of Democratic victories in the House and Senate. President Trump has repeatedly played up the low unemployment rate as evidence that his policies are working. It isn’t clear, however, that economic data will have much effect at the polls. Surveys show that views of the economy are split along partisan lines, with Democrats and even many independents expressing less optimism than Republicans.
Republicans are counting on the strong economy to help hold off a potential “blue wave” of Democratic victories in the House and Senate. President Trump has repeatedly played up the low unemployment rate as evidence that his policies are working. It isn’t clear, however, that economic data will have much effect at the polls. Surveys show that views of the economy are split along partisan lines, with Democrats and even many independents expressing less optimism than Republicans.
Economists will also be watching Friday’s report for any sign that Mr. Trump’s tariffs are hurting the economy. Many companies have expressed concern about the president’s trade policies, but there have been few concrete signs of damage so far. Manufacturing employment fell slightly in August, but many economists suspect the drop was a blip; other measures of that industry have been strong.
“We’re still seeing pretty decent hiring in manufacturing,” said Andrew Chamberlain, chief economist at the career site Glassdoor. “Tariffs have been talked about for months, but the real economic impact is just starting to be felt now.”
Beyond the headline jobs figures, one number that will get particular attention from economists this month will be the labor force participation rate. It’s an important way to answer a crucial question: How many workers are left on the sidelines?
The unemployment rate, by most economists’ estimation, is about as low as it can get. But the official definition of “unemployment” includes only people who are actively looking for work and available to start right away. Recent job growth has come in part from the larger pool of workers who wanted to work — or were willing to work under the right conditions — but weren’t actively searching. But no one is sure how many of those people are left.
If there is a rise in the labor force participation rate — the share of adults who are working or actively looking for work — that would be a sign that there are still more people available to come into the job market. But if it falls, that could mean the reserve of potential workers is nearly tapped. Lately, it has been more or less flat, as people entering the labor force are offset by retiring baby boomers.
One sign that the pool of workers is getting thinner: Wage growth is finally showing signs of picking up after years of anemic gains. Average hourly earnings rose 2.9 percent in August from a year earlier, the fastest growth since the recession ended. And there have been particularly strong gains for workers at the bottom of the earnings ladder; Amazon this week announced it would raise wages for all its workers in the United States to at least $15 an hour.
“The demand for workers is higher than ever and the supply just isn’t out there right now,” said Amy Glaser, a senior vice president at the staffing firm Adecco.
