September jobs report: a drastic slowdown in improvement, but further demonstrating an economy that *wants* to get better

September jobs report: a drastic slowdown in improvement, but further demonstrating an economy that *wants* to get better

HEADLINES:
  • 661,000 million jobs gained. The gains since May total a little over half of the 22.1 million job losses in March and April. The alternate, and more volatile measure in the household report was 275,000 jobs gained, which factors into the unemployment and underemployment rates below.
  • U3 unemployment rate fell -0.5% from 8.4% to 7.9%, compared with the January low of 3.5%.
  • U6 underemployment rate fell -1.6% from 14.2% to 12.8%, compared with the January low of 6.9%.
  • [UPDATE: Correcting error] Those on temporary layoff decreased 1.523 million to 4.637 million.
  • Permanent job losers increased by 345,000 to 3.756 million.
  • July was revised upward by 27,000. August was also revised upward by 118,000 respectively, for a net gain of 145,000 jobs compared with previous reports.

Leading employment indicators of a slowdown or recession

 

I am still highlighting these because of their leading nature for the economy overall.  These were positive:

  • the average manufacturing workweek rose 0.2hours from 40.0 hours to 40.2 hours. This is one of the 10 components of the LEI and will be a positive.
  • Manufacturing jobs rose by 66,000. Manufacturing has still lost -647,000  jobs in the past 7 months, or 5% of the total. A little over half of the total loss of 10.6% has been regained.
  • Construction jobs rose by 26,000. Even so, in the past 7 months -394,000 construction jobs have been lost, 5.2% of the total. About 1/3rd of the worst loss of 15.2% loss has been regained.
  • Residential construction jobs, which are even more leading, rose by 6,600. Even so, in the past 7 months there have still been -14,000 lost jobs, or about 1.7% of the total.
  • temporary jobs rose by 8,100. This is a *drastic* slowdown from the gains of the past few months, which typically were over 100,000. Since February, there have still been -463,800 jobs lost, or 15.8% of all temporary help jobs.
  • the number of people unemployed for 5 weeks or less rose by 271,000 to 2.552 million, compared with April’s total of 14.283 million.
  • Professional and business employment rose by 89,000, which is still -1.386 million, or about 6.4% below its February peak.

Wages of non-managerial workers

  • Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.01 from $24.78 to $24.79, which is a gain of 3.4% in the 7 months since the pandemic began. Gains had previously reflected that job losses were primarily among lower wage earners, who have been disproportionately recalled to work. That we have increased employment and increased wages as well is a very positive development.
Aggregate hours and wages:
  • the index of aggregate hours worked for non-managerial workers rose by 1.2%. In the past 7 months combined this has nevertheless fallen by about -7.4%.
  •  the index of aggregate payrolls for non-managerial workers rose by 1.2%. In the past 6 months combined this has nevertheless fallen by about -4.3%.
Other significant data:
  • Full time jobs were responsible for 54,000 of the gain in the household report.
  • Part time jobs were responsible for 188,000 of the gain in the household report.
  • The number of job holders who were part time for economic reasons fell by -1,272,000 to 6.300 million. This is still an increase since February of 1.982 million.

SUMMARY

This was certainly a positive report, but a drastic slowdown in improvement compared with prior months. Most noteworthy that that part-time jobs constituted about 3/4’s of the improvement. That permanent job losers increased substantially is not a good sign for the months going forward.

A “not so bad” element of the report is that both unemployment and underemployment have dropped to “normal” recession levels.

The best news in this report – the last before the November election – was that all  of the leading job sectors and indicators were positive. As I have said many times in the past few months, this is an economy that *wants* to improve. All that remains is gaining control over the pandemic, which has proved impossible for this Administration.

Comments Off on September jobs report: a drastic slowdown in improvement, but further demonstrating an economy that *wants* to get better | |