After last month’s disappointing jobs numbers, today’s report on the labor market showed more improvement. Payrolls rose 114,000 in September and 200,000 when upward revisions for prior months. The household population survey, an alternative measure of jobs that is more likely to include small-business start ups, increased 873,000, the most in almost ten years. As a result, the unemployment rate fell to 7.8 percent despite a 418,000 increase in the labor force. (The unemployment rate is down from 9 percent a year ago, even as the labor force is up a total of 805,000.)
In addition, total hours worked increased 0.4 percent in September and average hourly earnings rose 0.3 percent. Total cash earnings went up 0.7 percent, and are up 3.9 percent from a year ago. This proxy for consumer purchasing power means spending will continue to grow.
Manufacturing, in particular, looks softer, with payrolls in that sector down 16,000 in September after a 22,000 drop in August. (Only some of this is related to changes in the timing of auto retooling.) So it appears industrial activity, which led the early part of the private-sector recovery, is now losing steam. Also, the huge rise in civilian employment was goosed by part-timers, with a 322,000 overall gain and a 582,000 increase for those working part-time for economic reasons.
Although the labor-force-participation rate ticked up to 63.6 percent, it is still down from 64.1 percent a year ago.