Slow Payrolls Gains Still Good Enough to Ease Many Recession Fears

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After weaker manufacturing and non-manufacturing data inserted some caution in payroll growth this week, and considering a weaker than expected ADP private sector payrolls report, the expectations were low coming into Friday’s unemployment report. The Bureau of Labor Statistics has released its Employment Situation report for September and the verdict by the markets took stocks from a small 0.2% or 0.3% drop to a slight gain.

Nonfarm payrolls rose by 136,000 in September, under the consensus estimates of 145,000 from Dow Jones and from Econoday. One issue that is helping out is that the preliminary 130,000 payroll gains from August was revised up to 168,000, and July’s report was revised up 7,000 to 166,000.

Making up the gains, there were 114,000 private sector payroll gains and 22,000 payroll gains for government jobs.

Also worth noting was that September’s official unemployment rate hit a low of 3.5%, after having been flat at 3.7% in August. September’s reading was the lowest since December of 1969.

The month-over-month gain in average hourly earnings was flat (−$0.01 per hour to $28.09), after an 11-cent gain in August. Econoday had given a consensus estimate for a 0.3% gain in September. While that sounds weak, that hourly earnings report actually showed that wages were higher by 2.9% from September of 2018.

The Bureau of Labor Statistics also reported that the average workweek was flat at 34.4 hours. The labor force participation rate remained flat at 63.2%.

This is one of those sorts of economic reports that is not great but is not horrible. It should at least ease one more day’s worries over the endless calls for a recession. Now it’s just the rest of the world to worry about, and the upcoming trade talks with China.


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