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U.S. Economy, Showing Resilience, Added 156,000 Jobs Last Month U.S. Economy, Showing Resilience, Added 156,000 Jobs Last Month
(about 9 hours later)
As an election season defined by fears about jobs and wages enters the final stretch, the American economy looks a bit more resilient than some campaign rhetoric might suggest. Amid a presidential campaign marked by fears about the country’s economic future, the American jobs machine keeps chugging.
Employers added 156,000 jobs last month, the Labor Department said Friday, enough to accommodate new entrants to the labor force and entice back workers who dropped out after the Great Recession. Employers added 156,000 positions in September, the Labor Department said on Friday, enough to accommodate new entrants to the labor force and entice back workers who dropped out after the Great Recession. The unemployment rate, which had been stuck at 4.9 percent since spring, ticked up slightly to 5 percent, but that was mostly because more people were drawn into the labor force by evidence that hiring is still going strong.
The unemployment rate, which has been stuck at 4.9 percent since the spring, ticked up slightly to 5 percent. For all the anxiety at home and turmoil abroad, like the vote in Britain to withdraw from the European Union, the current expansion shows little prospect of ending abruptly.
For all the anxiety at home as well as turmoil abroad, like the “Brexit” vote in Britain, the American job machine continues to hum along. Average hourly earnings rose by 0.2 percentage point last month, bringing the wage gain over the last 12 months to 2.6 percent, well above the pace of inflation. The typical workweek also grew slightly in September, after a pullback in August.
Average hourly earnings moved higher by 0.2 percentage point last month, bringing the wage gain over the last 12 months to a decent gain of 2.6 percent. “It was solid, not spectacular,” said Diane Swonk, an independent economist in Chicago. “The good news is that participation went up, even though the unemployment rate did, too. Regaining that ground is very important.”
“It was solid, not spectacular,” said Diane Swonk, a veteran independent economist in Chicago. “The good news is that participation went up, even though the unemployment rate did, too. Regaining that ground is very important.” Before the report was released, economists on Wall Street looked for the economy to add 172,000 jobs in September. Revisions for July and August showed that 7,000 fewer jobs were created in those months than the Labor Department first estimated.
Before the report, economists on Wall Street looked for the economy to add 172,000 jobs in September. Revisions for July and August showed that 7,000 fewer jobs were created in those months than the Labor Department first estimated. Given the latest figures, the Federal Reserve is still expected to delay raising interest rates until late this year, and there was little in the report to suggest that the job gains might lead to significantly higher inflation.
In the wake of these figures, the Federal Reserve is still expected to raise interest rates late this year, and there was little in the report to suggest that the job gains might lead to inflation.
“There are still plenty of unemployed people out there, enough for employers to continue to hire at a substantial pace,” said Michael Gapen, chief United States economist at Barclays.“There are still plenty of unemployed people out there, enough for employers to continue to hire at a substantial pace,” said Michael Gapen, chief United States economist at Barclays.
“The expansion will end before you run out of labor,” added Mr. Gapen, who estimates that the unemployment rate could drop to 4 percent by the end of 2017. The participation rate inched up to 62.9 percent, which explains the rise in the overall jobless rate to 5 percent. “The expansion will end before you run out of labor,” added Mr. Gapen, who estimates that the unemployment rate could drop to 4 percent by the end of 2017. The overall participation rate inched up to 62.9 percent, above the low point of 62.4 percent last September, but well below the most recent peak of 66.4 percent in early 2007.
Moreover, the labor force itself jumped by nearly half a million, a bright spot in an otherwise steady-as-she-goes picture of the economy. With many prime-age workers still available to be hired — what economists and policy makers at the Federal Reserve blandly term “labor market slack” — the current pace of hiring should be able to continue with little threat of overheating the economy.
Since the start of the year, the nation has added an average of 178,000 jobs a month, less robust than the average monthly gain of 229,000 in 2015 but still a healthy reading given the longevity of the recovery and the overall unemployment rate. Moreover, the labor force itself jumped by nearly half a million, a bright spot in an otherwise steady picture of the economy.
Mr. Gapen attributed most of September’s dip in job creation, which was below both the consensus forecast and the annual average, to a surprising 11,000 drop in government payrolls. The nation has added an average of 178,000 jobs a month this year, less robust than the average monthly gain of 229,000 in 2015 but still a healthy reading given the longevity of the recovery and the slowdown in population growth among adults of working age.
Mr. Gapen attributed most of September’s dip in job creation, which was below the consensus forecast and the annual average, to an unexpected 11,000 drop in government payrolls.
The public sector added more than 50,000 positions in July and August, and Mr. Gapen said the private sector’s relative strength was what counted, not a slowdown in government hiring.The public sector added more than 50,000 positions in July and August, and Mr. Gapen said the private sector’s relative strength was what counted, not a slowdown in government hiring.
“It’s not a negative signal,” he said. “We see the miss as mainly a one-off government issue.”“It’s not a negative signal,” he said. “We see the miss as mainly a one-off government issue.”
Tens of millions of workers have barely felt the benefits of the recovery. Despite the robust hiring in the last couple of years, tens of millions of workers have barely felt the benefits of the recovery, and notable pockets of economic weakness remain more than seven years after it began.
And despite robust hiring in late 2015 and much of 2016, notable pockets of economic weakness remain, more than seven years after the start of the current recovery, especially in the oil industry and some industrial sectors.
The proportion of Americans in the labor force remains near 40-year lows, a sign that workers who gave up on finding jobs in recent years are only slowly returning to positions at malls, offices, factories and other workplaces.
But with many prime-age workers still available to be hired — what experts and policy makers at the Federal Reserve blandly term “labor market slack” — the current pace of hiring should be able to continue without much threat of overheating the economy.
Those two contrasting realities — healthy hiring and falling unemployment on the one hand, millions of economically sidelined Americans on the other — sustain the narrative of the two main presidential candidates, Hillary Clinton and Donald J. Trump.Those two contrasting realities — healthy hiring and falling unemployment on the one hand, millions of economically sidelined Americans on the other — sustain the narrative of the two main presidential candidates, Hillary Clinton and Donald J. Trump.
Both candidates’ critiques of the economy contain kernels of truth. Friday’s report, while generally strong, contained fodder for both.Both candidates’ critiques of the economy contain kernels of truth. Friday’s report, while generally strong, contained fodder for both.
The jump in participation, along with healthy gains in higher-paying professional services fields, bolsters Mrs. Clinton’s case that the economy is growing steadily and creating decent-paying jobs. The drop in manufacturing jobs by 13,000 will underscore fears among blue-collar voters that their livelihoods are imperiled, a main factor in Mr. Trump’s appeal. The jump in participation, with healthy gains in higher-paying professional services fields, bolsters Mrs. Clinton’s case that the economy is growing steadily and creating decent-paying jobs. The drop in manufacturing jobs by 13,000 will underscore fears among blue-collar voters that their livelihoods are imperiled, a main factor in Mr. Trump’s appeal.
In addition to strong gains in services, the closely watched construction industry added 23,000 jobs. The housing market has been booming in many parts of the country, and like manufacturing, construction remains an important source of middle-class jobs for workers with just high school diplomas.In addition to strong gains in services, the closely watched construction industry added 23,000 jobs. The housing market has been booming in many parts of the country, and like manufacturing, construction remains an important source of middle-class jobs for workers with just high school diplomas.
“I’m heartened to see that we have an unmistakable trend toward good-quality jobs,” said Labor Secretary Thomas E. Perez. “I know there’s a doom and gloom caucus out there, but they’re on a collision course with the facts.”
Another encouraging development was a slowdown in the huge round of job cuts in the mining and logging industries prompted by falling prices for oil and other commodities.Another encouraging development was a slowdown in the huge round of job cuts in the mining and logging industries prompted by falling prices for oil and other commodities.
After falling for 23 months in a row, with 223,000 jobs slashed during that time, employment in the sector was flat last month. After falling for 23 consecutive months, with 223,000 jobs slashed during that time, employment in the sector was flat last month.
“Instead of declining, jobs may start coming back to the sector,” Ms. Swonk said, noting that the recent rebound in oil prices may spur new investment in exploration and drilling after a two-year drought.“Instead of declining, jobs may start coming back to the sector,” Ms. Swonk said, noting that the recent rebound in oil prices may spur new investment in exploration and drilling after a two-year drought.
Although Wall Street watches every jobs report, this one will draw less attention because the Federal Reserve isn’t expected to raise rates until December at the earliest. The Fed will meet in November, but it is not expected to raise rates so close to the election. Although Wall Street watches every jobs report, this one drew less attention because the Federal Reserve is not expected to raise rates until December at the earliest. The Fed will meet in November, but it is not expected to raise rates so close to the election.
Moreover, holding off until December to decide whether to tighten monetary policy would give policy makers both the October and November jobs reports to consider. Moreover, waiting until December to decide whether to tighten monetary policy would allow policy makers to consider the October and November jobs reports.
Mr. Gapen said December remained the most likely target for the next interest rate increase by the Fed, but he added that it was hardly a lock. Mr. Gapen said December remained the most likely target for the Fed’s next interest rate increase, but he added that it was hardly certain.
“We think there’s a 60 percent chance the Fed will act, or slightly better than even,” he said. “There is a little something for everyone in this report from a policy-making perspective.”“We think there’s a 60 percent chance the Fed will act, or slightly better than even,” he said. “There is a little something for everyone in this report from a policy-making perspective.”
Despite steadily rising payrolls over the last several years, month-to-month wage gains have been very uneven this year. A big jump in January was followed by almost no increase in February. Similarly, a healthy performance in July seemed to peter out in August. The 2.6 percent increase in wages in the last 12 months is better than the 2.3 percent annual increase in 2015, but it is still less than many recession-ravaged workers would hope to see at this point in the recovery.
The 2.6 percent rise in wages over the last 12 months is better than the 2.3 percent annual increase in 2015, but it is still less than many recession-ravaged workers would hope to see at this point in the recovery. Still, there are plenty of signs the tighter labor market is finally paying off and producing raises, for workers at both the bottom and the top of the pay scale. This trend may also indicate that minimum wage increases in many states are beginning to filter through the broader economy.
Still, there are plenty of signs the tighter labor market is finally paying off and producing raises, particularly at the bottom and the top of the pay scale. It may also indicate that minimum wage increases in many states are beginning to filter through the broader economy.
As the more modest gain in payrolls for September suggests, some big employers have slowed the pace of recruiting slightly, but they continue to add to payrolls.As the more modest gain in payrolls for September suggests, some big employers have slowed the pace of recruiting slightly, but they continue to add to payrolls.
Ernst & Young, the giant accounting and consulting firm, plans to hire 15,200 people in the United States in fiscal 2017, which began July 1. Ernst & Young, the giant accounting and consulting firm, plans to hire 15,200 people in the United States in the 2017 fiscal year, which began July 1.
In fiscal 2016, Ernst & Young hired 16,375 people, said Dan Black, Ernst & Young Americas recruiting leader. “It’s not a put-the-brakes-on moment,” he said. “It’s more of a maintain-and-sustain scenario.” In the 2016 fiscal year, Ernst & Young hired 16,375 people, said Dan Black, Ernst & Young Americas recruiting leader. “It’s not a put-the-brakes-on moment,” he said. “It’s more of a maintain-and-sustain scenario.”
Another reason for the slight downtick in hiring is that existing workers seem less likely to jump ship right now, according to Mr. Black. “There’s been a lot of uncertainty and it’s coming to a head with Brexit and the election,” he said. “People may be hunkering down more than they have in the past.”