Commentary Directory
- Q1 GDP Growth Jumps 1.1% on Strong Personal Consumption
- A Strong March Leads to a Surge in Chinese GDP in Q1 2023
- Durable Goods Retail Sales Suffer from High Interest Rates and Wary Consumers
- Choppy GDP Means UK Should Avoid Q1 Recession
- Japanese Consumer Confidence Jumps to Highest Level in Over a Year
- The End of Summer Sees the End of Disinflation in Europe
- Labor Market Indicators are Starting to Unify on Easing in Hiring
- Inflation and Tight Financial Conditions Weigh on the German Consumer
- Euro Area Money Supply Contracts for the First Time Since 2010
- Dismal Economic Data Out of Germany
- Core Durable Goods New Orders See Gentle Uptrend in July
- More UK Data Pointing to Q3 Decline
- Whispers of a UK Contraction in Q3
- Japan's Core Inflation Resumes Uptrend in July
- Early July Economic Data Leads to a Sharp Increase in Q3 Growth Expectations
- UK CPI: Energy Inflation Crashes but Services Inflation is Still Sticky
- China's Weak Start to Q3 Means More PBoC Easing
- A Breather for the Eurozone as Inflation Hits Two-Year Low
- Germany's September CPI Report: A Clearer Picture of Inflation Trends
- US Manufacturing Demonstrates Resilience Amidst Volatility in August
- The ECB Prepares to Address Excess Liquidity Through the MRR
- Bank of Japan is Too Optimistic on Inflation
- The Bank of England Pauses in a Near Split Decision
- UK Inflation August Update: A Precursor to the Bank of England's Announcement
- Housing Starts Tumble in August Amid Rising Mortgage Rates
- US Retail Sales Grow at Fastest Monthly Rate Since the Start of the Year
- US Consumer Prices Surge in August Driven by Energy Costs
- August NFIB Survey Showed a Tough Environment for Small Businesses
- All Signs Point to a Weaker Labor Market in August
- Chinese CPI Trying to Buck the Deflation Trend
- Energy Prices Rise but the Core Disinflationary Trend is Maintained in September
- PPI's Quiet Rise and the Energy Elephant in the Room
- Small Businesses Grapple with Inflation and Financial Strain in September
- A Wacky September Jobs Report Shows Strong Labor Market
- A Look at the Fragile US Labor Market Ahead of the Nonfarm Payrolls Report
- Thoughts on GME and This Week in the Stock Market
- Record Home Price Levels Point to Strength in Post-Pandemic Economy
- The Stock Market Looks Overvalued, but It's Probably Not
- China GDP Growth Surpasses Expectations
- President-elect Joe Biden Introduces His "American Rescue Plan"
- Political Polarization Intensifies with Another Impeachment Along Party Lines
- Metal Demand Has a Bright Future in 2021 and Beyond
- What Happened to That US-China Trade Dispute?
- Civil Unrest, A Rising Threat to the 2021 Economy
- What's in the $900 Billion Relief Plan?
A Wacky September Jobs Report Shows Strong Labor Market
Jacob Hess
October 06, 2023
- Employment
- US
Today's jobs report was a bit wacky, filled with unexpected data that underscores the volatility of labor market statistics. While some indicators point to a robust job market, others suggest underlying weaknesses. And a whole bunch of revisions make the whole thing even more confusing. Let's break down the numbers and see what they mean for the economy and possibly for the Federal Reserve's next moves.
The most striking aspect of the report was the surge in nonfarm payroll employment, which added 336,000 jobs in September. This figure more than doubled the consensus expectations of 150,000, effectively debunking the notion that the labor market was on a downward trajectory. Revisions have been notable over the last few months, and most of those have been to the downside. However, in a bit of a twist, we saw revisions for July and August that added 119,000 jobs in total (July revised up 79,000 to 236,000 and August revised up 40,000 to 227,000). Despite the revisions, the September jobs gain was the largest this year. Finally, he unemployment rate remained at 3.8% after the few pips gain in August as the number of unemployed individuals was basically unchanged (only up 5,000) and the labor force participation rate stayed at 62.8%. All of these data points point to a strong labor market taking analysts and likely the Fed by surprise.
However, the report wasn't without its caveats. Household data indicated that the uptick in employment was largely fueled by part-time workers, which increased by 151,000, while full-time workers actually decreased by -22,000. This lends credence to the idea that the significant job gains may be a result of seasonal hiring as we approach the holiday season in Q4. This is further supported by the fact that the service sector did all of the heavy lifting this month. Services firms added 234,000 jobs, while the goods sector saw a modest bump of just 29,000. Wage growth took a small step down in September to contribute to weak hiring narrative. Average hourly earnings improved 0.21% MoM and was up 4.15% YoY, down from 4.26% YoY in August. The annualized rate of September’s monthly gain was just 2.5%, a very pleasing figure for the Fed.
A topsy turvy jobs report like this one will leave a lot of people scratching there heads, including Fed Chair Jerome Powell. While early signs had pointed to a softening labor market, this report throws a wrench in that narrative. The frequent and directionally inconsistent revisions add another layer of complexity to the task of understanding the new data's impact on the economic landscape. However, amid all the uncertainty, one thing remains clear: there's no mass layoffs, and a recession in 2023 appears increasingly unlikely.