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Non-farm payroll results from the U.S. Bureau of Labor Statistics (BLS) were released this morning, with results well below what analysts had been expecting: 661K new jobs were generated overall for September, well beneath the 800K-1 million positions anticipated. The Unemployment Rate, however, came in at 7.9% — still a high figure historically, but the first time we’ve been under 8% since pre-pandemic levels reported in March.
The private sector reportedly gained 877K new jobs, which was in the ballpark of what was expected — and nearer to the 749K reported in the private-sector payroll survey from ADP (ADP - Free Report) on Wednesday — and countered notably by a big cut-back in government census jobs on the month. Local and State Governments alone shed more than 200K positions in September.
Big winners brought in huge monthly job gains: Leisure/Hospitality +318K, Retail +142K and Healthcare +107K. These extraordinary figures are several times higher than what would be considered “normal” monthly jobs gains, and likely speak to the re-hiring of staff in these sectors who had been let go during the height of the pandemic.
The BLS also has a note indicating the Unemployment Rate may have been higher by 0.4% if not for a discrepancy between classifications of temporary layoffs versus permanent job closures. Still, any improvement to this monthly tally is positive news.
Revisions to the previous two months were extravagant: August’s initially reported 1.37 million shot up to 1.49 million today. July, which originally came in at 1.76 million and was then revised down to 1.73 million, is now back up to 1.76 million. This puts today’s 661K headline in starker contrast, though perhaps there is room for a major upward revision here in the coming months, as well.
Even with a lower Unemployment Rate, Labor Force Participation dropped to 61.4% last month from 61.7% in August. Part of the hopefulness in past months of ascending employment numbers were looking for more entrants into the workforce; this figure takes a step backward. Average Hourly Earnings were also disappointing at +0.1%, lower than the +0.2% estimated and the +0.4% in August.
So while the BLS numbers continue to move in the right direction, the rate of change continues to slow, with plenty of metrics beneath the headline looking stubbornly, if slightly, negative. We also see layoffs in airlines and Disney’s (DIS - Free Report) Parks enterprise occurring outside the scope of today’s report; other businesses newly affected by a “second wave” in Covid-19 infections may turn the U.S. labor market in a negative direction even further.
Speaking of, market indexes were already down ahead of the BLS report on global headline news that President Trump and the First Lady have tested positive for the coronavirus. This puts a new wrinkle into the realities of Covid-19 in the U.S., to say nothing of how it may affect the outcome of the presidential election, which is a month and a day away.
The Dow is currently dow 490 points, the Nasdaq has sold off 280 points and the S&P 500 is -65 points ahead of the opening bell. Markets now risk giving up its week of gains.
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Disappointing Jobs Addition in September
Non-farm payroll results from the U.S. Bureau of Labor Statistics (BLS) were released this morning, with results well below what analysts had been expecting: 661K new jobs were generated overall for September, well beneath the 800K-1 million positions anticipated. The Unemployment Rate, however, came in at 7.9% — still a high figure historically, but the first time we’ve been under 8% since pre-pandemic levels reported in March.
The private sector reportedly gained 877K new jobs, which was in the ballpark of what was expected — and nearer to the 749K reported in the private-sector payroll survey from ADP (ADP - Free Report) on Wednesday — and countered notably by a big cut-back in government census jobs on the month. Local and State Governments alone shed more than 200K positions in September.
Big winners brought in huge monthly job gains: Leisure/Hospitality +318K, Retail +142K and Healthcare +107K. These extraordinary figures are several times higher than what would be considered “normal” monthly jobs gains, and likely speak to the re-hiring of staff in these sectors who had been let go during the height of the pandemic.
The BLS also has a note indicating the Unemployment Rate may have been higher by 0.4% if not for a discrepancy between classifications of temporary layoffs versus permanent job closures. Still, any improvement to this monthly tally is positive news.
Revisions to the previous two months were extravagant: August’s initially reported 1.37 million shot up to 1.49 million today. July, which originally came in at 1.76 million and was then revised down to 1.73 million, is now back up to 1.76 million. This puts today’s 661K headline in starker contrast, though perhaps there is room for a major upward revision here in the coming months, as well.
Even with a lower Unemployment Rate, Labor Force Participation dropped to 61.4% last month from 61.7% in August. Part of the hopefulness in past months of ascending employment numbers were looking for more entrants into the workforce; this figure takes a step backward. Average Hourly Earnings were also disappointing at +0.1%, lower than the +0.2% estimated and the +0.4% in August.
So while the BLS numbers continue to move in the right direction, the rate of change continues to slow, with plenty of metrics beneath the headline looking stubbornly, if slightly, negative. We also see layoffs in airlines and Disney’s (DIS - Free Report) Parks enterprise occurring outside the scope of today’s report; other businesses newly affected by a “second wave” in Covid-19 infections may turn the U.S. labor market in a negative direction even further.
Speaking of, market indexes were already down ahead of the BLS report on global headline news that President Trump and the First Lady have tested positive for the coronavirus. This puts a new wrinkle into the realities of Covid-19 in the U.S., to say nothing of how it may affect the outcome of the presidential election, which is a month and a day away.
The Dow is currently dow 490 points, the Nasdaq has sold off 280 points and the S&P 500 is -65 points ahead of the opening bell. Markets now risk giving up its week of gains.