Payrolls rise more than expected, but jobless rate remains unchanged
Today’s jobs report was more of the same: further evidence that the economy and jobs market remains ever-so-slightly expansionary, but struggling to find another gear that would suggest improvement is imminent. Confidence is very low and with each month that passes with no meaningful improvement in conditions, pessimism becomes more entrenched, raising the risk of a vicious circle.
In September, the nation’s jobless rate remained stuck at 9.1%, although broader measures of unemployment that includes discouraged and underutilized workers increased to 16.5%.
On a relatively positive note, nonfarm payrolls rose by 103,000 in September, while the August result was revised upward to 57,000. As has been the case, private sector job creation led the way, particularly in the service sector, while the public sector continues to shed jobs. While better than anticipated, the economy needs to consistently create jobs at a much faster pace to bring down the jobless rate over time.
Other elements of the report were also slightly positive, as both average weekly hours worked and average hourly earnings rose slightly in September. The impact in both cases, however, was simply to return both to their July levels. In the past year, average hourly earnings grew less than 2%. Once inflation is factored in, the stagnation in wage growth is a significant impediment to greater consumer spending – a key driver to economic growth.
The big picture for jobs is similar to the story on the economy as a whole: still moving forward, but at an uneven, meager pace that is at risk of stalling or even slipping into negative territory.