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Friday, October 2, 2015

September 2015 Unemployment Rate, Jobs -- Mediocre.

The September Jobs Reports were released today, Friday, October 2.  The report is cloudy; not particularly great.

September Highlights:

  • 142,000 total new payroll jobs; 118,000 new private sector jobs; a 24,000 increase in the number of government jobs.)  These numbers are fairly low and less than the 203,000 that the pundits and prognosticators predicted, probably due to uncertainty in the markets and uncertainty over China.  This is a low number of private sector jobs, and a relatively high number of new government jobs.
    (Full-time/part-time breakdown will be available  HERE later today.)  Three out of the last seven months have shown job growth of less than 150,000.
  • The BLS decreased their July and their August estimates.  July was decreased from +245,000 to +223,000, and the August estimate was revised from +173,000 to +136,000. "With these revisions, employment gains in July and August combined were 59,000 less than previously reported. Over the past 3 months, job gains have averaged 167,000 per month... "Thus far in 2015, job growth has averaged 198,000 per month, compared with an average monthly gain of 260,000 in 2014."
  • The unemployment rate stayed the same at 5.1% as the number of unemployed decreased by 114,000. and as the civilian labor force also decreased, by 350,000.  We now have 7,915,000 officially unemployed, the lowest number of unemployed since early 2008, over 7 years ago.  As a result of fewer people in the labor force, the labor force participation rate declined to 62.4%.
  • The number of people not in the labor force (people in school, people retired, people home with children, etc.) climbed to 94,600,000, another new record.  This probably reflects many more  people retiring.. More on that later.
  • Alternate unemployment rate fell from 10.3% down to 10.0%.  That decline primarily reflected a decrease in the number of people who were working part-time "involuntarily" because they couldn't find full-time jobs.
  • As mentioned above, the labor force participation rate declined to 62.4% after being stable for 3 months.  The number of people in the labor force decreased slightly by a large 350,000.   Year over year, we have about 900,000 MORE people in the labor force.  Remember that there is NO ideal labor force size and much of the current decrease in the size of the labor force is due to Baby Boomers retiring in great numbers.
  • The overall number of people employed decreased by  236,000.  This may reflect people retiring as well as young people returning to school.  More on that later.
  • The number of people working full-time decreased by 185,000 last month; the number of people working part-time increased by about 53,000 last month.  Despite the decrease in full-time workers this month, year over year, we have about 2.6 million MORE people working full-time and 400,000 FEWER people working part-time.

September 2015 reports: (As usual, notation on the links will be changed to "UPDATED for September" when the updated reports become available.  Not all reports are updated every month.) 

More highlights and reports will continue to be posted here throughout the day and over the weekend.  Please check back!

Preview (written Thursday night, October 1, before the BLS jobs release):


The "pundits" are still expecting an additional 203,000 jobs when the numbers are announced tomorrow morning, Friday, October 2nd, but there is some uncertainty.  Here's a summary:

1.  
Reuters: 
 Reuters conducts a survey of economists and reports the consensus:

U.S. employers likely added jobs at a brisk pace in September, a sign that the labor market is near full strength and could push the Federal Reserve to raise interest rates at one of its two remaining meetings this year.

The Labor Department's monthly employment report, due on Friday at 8:30 a.m. EDT (1230 GMT), will almost certainly show the U.S. economy is growing enough to push the jobless rate lower in the coming months.

Economists surveyed by Reuters forecast U.S. payrolls outside of farming rose by 203,000 last month, bouncing back from softer job growth in August despite worries a China-led global economic slowdown is sapping America's strength. 
"The U.S. economy is alive and kicking," said Phil Lachowycz, an economist at Fathom Consulting in London.
2. ADP: The private payroller ADP's report, which usually precedes the BLS report by two days, estimated that 200,000 more private-sector jobs were created in September 2015.  ADP estimated increases in all sectors but manufacturing.  Manufacturing was estimated to have lost 15,000 jobs in September.Mark Zandi, chief economist of Moody’s Analytics, said, “The U.S. job machine continues to produce jobs at a strong and consistent pace. Despite job losses in the energy and manufacturing industries, the economy is creating close to 200,000 jobs per month. At this pace full employment is fast approaching.”

3.  The Consumer Sentiment index compiled by the University of Michigan  showed a decline from 91.9 in August to 87.2 in September.  However, the Sentiment Index is still 3% than it was a year ago, in September 2014.  
The decline in optimism continued to narrow in late September as consumers increasingly concluded that the stock market declines had more to do with international conditions than the domestic economy. While the September Sentiment Index was at the lowest level in eleven months, it was still higher than in any prior month since May 2007. To be sure, a raft of recent events have been viewed as negative economic indicators by consumers, including falling commodity prices, weakened Chinese and other economies as well as continued stresses on European countries. Although most believe the domestic economy is still largely insulated, they have lowered the pace of job and wage growth that they now anticipate. The true significance of these findings is not the diminished economic prospects, but that consumers now believe that global economic trends can directly influence their own job and wage prospects as well as indirectly via financial markets. While now small, the influence of the global economy is certain to rise in the future and prompt widespread adjustments by consumers and policy makers.
 4.  The search engine Linkup.com's blog  was very gloomy, gloomier than it has been in months.  I will swear, however, that Toby Dayton's writing on the Linkup Blog is among the best out there.  I'd rather read Dayton than Reuters, even when Toby is being very pessimistic.  First Toby quotes something he wrote in early October two years ago:     
Like Walter White’s (of Breaking Bad fame) descent into apocalyptic madness, it is hard to imagine that things could get any more lunatic, dysfunctional, or destructive in Washington these days. The crazies in the House, under the leadership of Ted Cruz, aka Heisenberg, have taken over the asylum and are hell-bent on dragging the country along on their suicidal death wish. And the worst part of the insanity that characterizes the Republican party these days is the fact that their utterly anti-democratic, anarchic obstinance could not only destroy an already fragile economic recovery in the U.S., but also stop dead in its tracks a nascent global recovery.
Then he brings the situation into the present:  
Given the events of the past few months, and particularly in the past few weeks, it turns out that things in the asylum have, in fact, gotten much, much worse. Ted Cruz is now running for President, the crazies have eliminated John Boehner (the least demented among the deranged), and once again, the inmates in the psych ward are threatening to shut down the government despite the fact that 60% of Americans insist that any budget deal must include funding for Planned Parenthood.
He concludes:
Based on steep declines in new and total job openings in LinkUp’s job search engine in August, we are forecasting that the U.S. economy added a net gain of only 75,000 jobs in September. - 
That would be a big problem.  Let's hope that Dayton is wrong.   


 5.  Finally, the number of Americans filing new claims for unemployment benefits AND the number of Americans filing for continuing benefits continue to be very low, even though the number went up by 10,000 for the week ending September 26th.   The unadjusted number of new claims, about 215,000, is the lowest number of unadjusted new claims in September since back in September 1999.  So despite some labor market concerns due to International craziness, few people are getting laid off.  You can see more here at the Department of Labor's site.

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