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The Corner

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Jobs Growth Keeps Slowing in September



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The U.S. economy added 148,000 jobs in September, which is in line with a slight slowdown in jobs growth this summer and fall. Economists had expected 180,000 jobs to be added, and for the unemployment rate to remain at 7.2 percent — it ticked down to 7.2 percent. But, while the unemployment rate also dropped at the last report, in August (due to lower labor-force participation) the three months through August saw substantially lower jobs growth than the three months beginning the year (151,000 vs. 233,000), in part because the BLS revised down some of the summer numbers — and this is right in line with that slowdown. The U.S. economy has now averaged about 150,000 jobs added over the past four months, and 143,000 over the last three, a depressingly low pace — enough to keep unemployment dropping, but just barely.

This would lend more support to the Fed’s decision not to “taper” its monetary stimulus in September, as had been planned — since the weak showing they based that decision on this summer hasn’t improved. If the next couple months show some damage from the federal government shutdown and/or a continuation of this weak trend, and with the appointment of the dovish Janet Yellen to run the Fed (she won’t take over next year but there’s value in continuity), the Fed probably won’t announce it’s tapering its bond buying at its meeting this December, either. That would be why stocks and bonds actually rose on this morning’s bad news. 

The August performance was revised up, to 193,000 jobs, but the July performance was revised down, to a dismal 89,000 jobs, for a net increase of just 9,000. The impact of the federal government shutdown isn’t seen in this report, except inasmuch as it caused employers worried about uncertainty to hold off hiring in September; we’ll have to see the next couple jobs reports 

Interestingly, while federal-government employment dropped in August, as they have been slowly for the past couple years, overall government payrolls are up, by 22,000 jobs, because state and local governments are beginning to hire again. (Improvements in their budgets tend to lag the economy, because they have a limited ability to borrow, and rely on slow-to-recover revenues like real-estate taxes.) Of course, this actually makes the private-sector job market look worse — 148,000 jobs were added, but just 126,000 of those were in the private sector.

Another way to look at the BLS report is by earnings and hours of those actually employed, which offered mixed news: The length of the average workweek remained unchanged, but hourly earnings did rise slightly, by 3 cents.



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