Guest blog by Dr. Tom Cunningham, Economist and MST Advisory Services, Senior Advisor- Economics
The headline numbers from the Bureau of Labor Statistics’ (BLS) September jobs report suggest a mixed employment situation. New jobs came in at just 134,000, well below the expected 180,000, while that headline unemployment rate, U3, fell 0.2 percentage points to 3.7 percent, slightly lower than the 3.8 percent expected.
But there is more here than meets the eye. The relatively weak gains were distorted by hurricane Florence, which made landfall during the week the survey was conducted and negatively impacted employment in some regions and sectors. In its report, the BLS notes this, explaining that it is unable, however, to determine the precise impact of Florence on the job numbers. As well, the two previous months’ numbers were revised upward, and average hourly earnings are growing at a rate of 2.8 percent year over year. Looking beyond the headline number, it appears that the fundamental strength in the labor market persists. Business and Professional services and Healthcare continued to show strength among employment sectors.
The broader measure of labor underutilization, U6, ticked up 0.1 to 7.5 percent unemployment. Most of the increase was due to a surge in one of the categories measured by U6, the number of people employed part time for “economic reasons,” that is, people who would rather be working a full-time job.
Overall labor market fundamentals remain strong, absent the distortions caused by Hurricane Florence.
About the Author
Tom Cunningham holds a Ph.D. in economics from Columbia University and was senior economist with the Federal Reserve Bank of Atlanta from 1985 to 2015. Mr. Cunningham serves as a consultant to MST in the creation and ongoing development of the MST Virtual Economist and is the MST Advisory economics specialist.
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