The all-important September read on non-farm payrolls from the U.S. Bureau of Labor Statistics (BLS) has come out ahead of the opening bell this morning, with a tepid jobs totals figure accompanied by a terrific new Unemployment Rate: 3.5%! The last time we were at 3.5%, a calculator cost you $300, Cher was still with Sonny, and the Rolling Stones were still in their 20s.
The headline on non-farm payrolls, however, came in beneath expectations at +136K, though there is good new in revisions for the previous two months: +38K to 168K in August (a perennially underreported month; you can set your watch by upward August BLS revisions) and +7000 jobs in July to 166K. This brings the 3-month average to 157K — easily enough new jobs to more than make up for retiring baby boomers, though a far cry from 2018’s average 223K hires per month.
Healthcare predictably led the way with 39K new positions filled, followed by Professional/Business Services at 34K. Manufacturing posted 2000 jobs lost in the month, while Retail continued its long skid, particularly in clothing and accessories, down 11K positions in August. The Labor Force Participation Rate was flat at 63.2%, while the U-6, often referred to as “real” unemployment, is down to 6.9% — the lowest monthly post in quite some time.
If we see anything to be wary of here, it is in the flat Average Hourly Earnings rate month over month, actually down 1 cent per hour, while rising 2.9% year over year. This is disappointing because we’ve seen growth of 0.3% and 0.4% in recent months, indicating the plethora of jobs in the U.S. have finally begun to bring more value to the workforce in terms of wage growth. Today’s sub-headline erases this sentiment, at least in the near term.
Pre-markets are up modestly on the news, with the big shiny 3.5% Unemployment Rate leading the way in headlines (here and elsewhere). As long as we also understand slowing jobs growth is a reality today, and wage growth still looks stubbornly mired at lower-than-expected rates, then we can feel good about this morning’s report but look ahead clear-eyed that the major gusts of this long bull-cycle wind have by now passed.