Comments on September Employment Report

The headline jobs number in the September employment report was well above expectations, and employment for the previous two months was revised up by 119,000, combined.  The participation rate and the employment population ratio were both unchanged, and the unemployment rate was also unchanged at 3.8%.

Leisure and hospitality gained 96 thousand jobs in September.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 184 thousand jobs since February 2020.  So, leisure and hospitality has now added back about 98% all of the jobs lost in March and April 2020. 

Construction employment increased 11 thousand and is now 406 thousand above the pre-pandemic level. 

Manufacturing employment increased 17 thousand jobs and is now 226 thousand above the pre-pandemic level.

Earlier: September Employment Report: 336 thousand Jobs, 3.8% Unemployment Rate

In September, the year-over-year employment change was 3.09 million jobs.

Job Streak

Through September 2023, the employment report indicated positive job growth for 33 consecutive months, putting the current streak in a tie for 5th place of the longest job streaks in US history (since 1939).

The UAW strike will likely impact the October and might contribute to a negative jobs report.

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2019	100
2	1990	48
3	2007	46
4	1979	45
5 tie	1943	33
5 tie	1986	33
5 tie	2000	33
5 tie	20231	33
9	1967	29
10	1995	25
1Currrent Streak

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 participation rate was unchanged in September at 83.5% from 83.5% in August, and the 25 to 54 employment population ratio declined to 80.8% from 80.9% the previous month.

Both are above the pre-pandemic levels.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.2% YoY in September.   On an annualized basis, wages increased 2.5% in September.

Part Time for Economic Reasons

From the BLS report:

"The number of persons employed part time for economic reasons, at 4.1 million, changed little in September. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons decreased in September to 4.07 million from 4.22 million in August. This is below pre-recession levels.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 7.0% from 7.1% in the previous month. This is down from the record high in April 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is at the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.216 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.296 million the previous month.

This is close to the pre-pandemic levels.

Summary:

The headline monthly jobs number was well above consensus expectations; and July and August payrolls were revised up by 119,000 combined.  The unemployment rate was unchanged.

This was a very strong report.