September Report Muddies Waters of Wishy-Washy Job Market
As is typical for the first Friday in the month, the jobs numbers for the preceding month have been released by the U.S. Bureau of Labor Statistics. For the second month in a row, job numbers are below 150,000 new jobs created, and unemployment levels continue to stand pat.
Alas, a "new normal" for the total number of new jobs appears to be emerging. Over the past two months, monthly job growth has fallen well below 200,000 (136,000 for July, and a lackluster 142,000 for August, with the July numbers also revised downward by 22,000).
Economists generally believe that numbers over 300,000 are needed to make ongoing inroads against unemployment levels, and that numbers over 200,000 are needed to ensure ongoing recovery in the job market. Right now, we've got none of that.
On top of the lackluster new jobs counts, the average workweek declined slightly to 34.5 hours, and average hourly earnings declined by a penny to $25.09. With lower-than-average job growth (the three month average for July, August, and September stands at 167,000), and more-or-less stagnant wages, the climate of economic recovery appears to have stalled somewhat.
Carl Tannenbaum, chief economist at North Trust in Chicago, Ill., observed that "the unemployment rate would have risen if the labor participation rate hadn't fallen." (That quote comes from a New York Times story this morning: Jobs Report is Lackluster, Raising Concern on Economy's Course).
As compared to the jobs creation average so far for this year of 198,000, the latest three-month-average shows itself to be -32,000 slower than the annual average, or 16 percent off the pace.
Job growth continues in health care, with a gain of 34,000 jobs for September only slightly off the 38,000 monthly average for 2015 so far. Information is finally showing some (very modest) gains with 12,000 jobs added in September, a considerable jump over the average gains of just under 5,000 such positions monthly for 2015. This is the first noticeable increase in information jobs reported for 2015, and represents a small ray of sunshine for our home sector at least.
Other growth areas for September include professional and business services (+31,000, considerably lower than the +45,000 monthly average for this sector YTD), retail trade (+24,000, about 10 percent off the YTD average of +27,000), and food services (+21,000, about 45 percent below the +39,000 YTD average). Mining continued to experience job losses at -10,000 for September, in line with the -11,000 YTD average. All other sectors were flat, with little or no change, either plus or minus.
What does it all mean? For most informed observers, these numbers call into real question the Federal Reserve Bank's announced intentions to boost interest rates before the year's end. While there's no doubt that a rate hike is both needed and desirable, the timing still appears to be best summarized as "not just yet."
The stock markets will find little to like in this latest jobs report, and all the major indexes are already down by more than 1 percent this morning, just 90 minutes into the trading day as I write this blog post. Drat!
It appears that the continuing trend toward "slow growth mode" will keep on keeping on, with the brakes having just been pushed a little bit harder on growth. Nothing short of a miracle will pull things out of the doldrums any time soon, and I can see no such miracles forthcoming.