The U.S. economy sprouted 263,000 new jobs in September, the U.S. labor department reported.
The seasonally adjusted total was less than August’s 315,000 new berths and well below the monthly average of 400,000 over this year’s first six months.
The leisure and hospitality sectors led in hiring, adding 83,000 jobs, although the sectors remain one million jobs short of their pre-COVID totals, with about 6.7 percent fewer workers.
Healthcare and social service agencies brought on another 75,000 workers, finally regaining the strength of their 2019 labor force.
Construction jobs grew by 19,000 and manufacturing’s workforce by 22,000, despite data showing the sectors’ economic output slowing.
The increased number of workers hired in those sectors should ease fears of an imminent recession, CNBC noted.
A few areas shed workers, including government agencies, which pared payrolls by 25,000. Retail, transportation, and warehousing rid themselves of 9,000 workers collectively as consumers cut back spending on merchandise.
The unemployment rate ticked down to 3.5 percent last month from 3.7 in August, matching July’s 50-year record low.
However, the number of people actively working or looking for work also fell in September from the month before. The so-called “labor force participation rate” slipped from 62.4 percent of adults to 62.3 and remains below pre-COVID levels.
Among people not working, 4.8 million cited the lack of affordable child care as a reason in a census bureau poll. Another 1.7 million said they were caring for an elder.
“We are seeing labor demand cool,” Wells Fargo senior economist Sarah House told The Wall Street Journal, “but we have a long way to go toward restoring balance between supply and demand for labor.”
Average hourly earnings, including salaries and wages, grew 5 percent in September, year on year, down from 5.2 percent in August and the slowest growth since December. Hourly wages alone crept up 0.3 percent, according to figures from the U.S. Bureau of Labor Statistics.
While considered strong, the gain in earnings is “still too strong for an inflation target of 2 percent but a step in the right direction,” House said.
Jobless Claims Jump
The number of new claims for unemployment benefits rose by 29,000 to 219,000 during the week ending 1 October, the U.S. Labor Department reported, more than the 203,000 predicted by economists polled by Reuters.
In September, U.S. employers announced 29,989 jobs to be cut, 46.4 percent more than in August, according to a report by outplacement specialist Challenger, Gray & Christmas.
Job losses number 67.6 percent more than a year previous, with retailers posting the most cuts, although layoffs total 21 percent fewer than during the first nine months of 2021.
TREND FORECAST: We see a growing number of unemployment claims and jobs cut, a sharp reduction in unfilled jobs (see “August Job Openings a Million Less Than In July” in this issue), and a multi-decade low employment rate.
We are at a crossover point: the economy is reaching full employment just as it is sliding toward recession. (The first two quarters of this year showed shrinking economic productivity, which is the technical definition of a recession.)
The number of available jobs going unfilled will continue to shrink and the number of new claims for unemployment payments will grow as the year moves toward its end. (See, “WHEN THE ECONOMY FALLS JOBS GO WITH IT,” in this and past Trends Journals).