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Friday, October 04, 2024

Comments on September Employment Report

by Calculated Risk on 10/04/2024 09:16:00 AM

The headline jobs number in the September employment report was well above expectations, and July and August payrolls were revised up by 72,000 combined.   The participation rate was unchanged, the employment population ratio increased, and the unemployment rate decreased to 4.1%.


Construction employment increased 25 thousand and is now 688 thousand above the pre-pandemic level. 

Manufacturing employment decreased 7 thousand and is now 137 thousand above the pre-pandemic level.


Prime (25 to 54 Years Old) Participation

Employment Population Ratio, 25 to 54Since 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 years old participation decreased in September to 83.8% from 83.9% in August.

The 25 to 54 employment population ratio was unchanged at 80.9% from 80.9% the previous month.

Both are above pre-pandemic levels and near the highest level this millennium.

Average Hourly Wages

WagesThe 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 4.0% YoY in September.   

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:
"The number of people employed part time for economic reasons changed little at 4.6 million in September. This measure is up from 4.1 million a year earlier. These individuals would have preferred full-time employment but 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 4.62 million from 4.83 million in August.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 7.7% from 7.9% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

Unemployed Over 26 WeeksThis graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.63 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.53 million the previous month.

This is down from post-pandemic high of 4.174 million, and up from the recent low of 1.050 million.

This is above pre-pandemic levels.

Job Streak

Through September 2024, the employment report indicated positive job growth for 45 consecutive months, putting the current streak tied in 4th place of the longest job streaks in US history (since 1939).  It appears this streak will survive the annual benchmark revision (that will revise down job growth).

Headline Jobs, Top 10 Streaks
Year EndedStreak, Months
12019100
2199048
3200746
4 tie197945
4 tie2024145
6 tie194333
6 tie198633
6 tie200033
9196729
10199525
1Currrent Streak

Summary:

The headline jobs number in the September employment report was well above expectations, and July and August payrolls were revised up by 72,000 combined. The participation rate was unchanged, the employment population ratio increased, and the unemployment rate decreased to 4.1%.

This was a strong employment report.