On Tuesday, the Bureau of Labor Statistics (BLS) released their report on the state of the U.S. labor market in September. Before releasing the report, surveys showed that economists expected 180,000 jobs were added and the unemployment rate to remain unchanged at 7.3 percent. The report, however, did not meet these expectations and provided an overall mixed outlook for Americans.
A few highlights from the report include:
1. The number of net jobs added was 148,000, which is much lower than anticipated; the July and August employment reports were revised to show a net additional gain of 9,000; the average number of jobs added per month over the last year is 185,000; and there are 11.3 million people unemployed.
2. The unemployment rate declined by 0.1 percent to 7.2 percent; the U-6 rate declined to 13.1 percent; the employment-to-population for 25 to 54 year olds was unchanged at 75.9 percent; and the labor force participation rate remained at 63.2 percent despite 73,000 more entering the labor force.
3. Average hourly earnings increased by 3 cents to $24.09 for a 2.1 percent increase over the last year; compared with the last reported headline Consumer Price Index (CPI) inflation rate of 1.5 percent over the same time period, real average hourly earnings are up 0.6 percent-at least for those who have a job.
Since the surveys are completed on the 12th day of the month, September’s report was not affected by the 16-day government shutdown. We should expect to see substantial effects on subsequent reports from the shutdown, namely October and November, but these effects will be teased out by December.
Although the unemployment rate declined without a drop in the labor force and the gains in employment over the last few years are positive signs, the bleak outlook by 11.3 million unemployed Americans-of which 4.2 million have been unemployed for more than six months-and the 1.8 million fewer employed since the peak in January 2008 continues. Of course, these data do not include many individuals who find it extremely difficult to pay their bills after giving up looking for work, which this month set a record of 91 million Americans not in the labor force.