It’s not that there were no encouraging bits in the September jobs report. There were. Long-term unemployment fell. So did people working part-time who would prefer full-time gigs. Ugh, but the rest.
1.) Just 142,000 net new payrolls (and a mere 118,000 in the private sector) vs. the 200,000 consensus forecast. Also, the July and August numbers were revised lower by 59,000.
2.) Household employment fell by 236,000. And if combine that number with the payrolls number using the 20/80 weighting suggested by economist Justin Wolfers, the economy may have lost something like 66,000 jobs last month.
3.) In the third quarter, average monthly job gains averaged 167,000 versus 237,000 in 3Q 2014. Deceleration.
4.) Both the labor force participation and employment rates fell, the former to a 38-year low. Those “Not in Labor Force” increased by 579,000, while “Employed” fell by 236,000.
5.) Average hourly earnings actually fell by a penny with the long-term growth trend stuck around 2%.
In other words, how did everyone enjoy the sweet spot of the Great Recovery? Those were heady days! Good times had by all. Here is how Barclays summed up the month:
Beyond the headline number, we see broad-based weakness in US labor markets, with the past month’s revisions now showing a decidedly softer trend growth in jobs. Although the U3 unemployment rate was unchanged at 5.1%, the participation rate fell 0.2 to 62.4%. The broader U6 underemployment rate, which includes part-time workers, declined three-tenths, to 10.0%, as the number of workers who are part time for economic reasons dropped sharply. However, given the overall weakness in the report, we do not take that decline as a positive sign, as some of that decline likely reflects workers leaving the workforce rather than finding full time work. Average hourly earnings were also soft, rising 0.0% m/m, much weaker than expected.
This report is much weaker than we had expected. We believe the weakness in payroll employment growth and hours worked reflect the deceleration in activity abroad and, more recently, the pickup in financial market volatility domestically. Past experience suggests that these episodes temporarily weigh on demand for labor and we raised this as a risk to our outlook on August 24 when we pushed out our expectation for the first rate hike to March 2016. Our past research on the subject suggests it takes more than just a few months for these pot holes in global growth and uncertainty to fade. In the meantime, US activity, payroll growth, and inflation tend to soften. As such, we retain our view that rate hikes will be deferred past year end and we believe this employment report substantially reduces the probability of a rate hike from the FOMC this year.
from AEI » Latest Content http://ift.tt/1Go5TKf
0 التعليقات:
Post a Comment