In a significant development for the U.S. economy, the Labor Department reported on Thursday that 119,000 jobs were added in September, a figure that outstripped Wall Street forecasts. The release of this report was postponed due to a government shutdown that lasted approximately 40 days, offering a crucial glimpse into the labor market's condition prior to this period of closure.
The Bureau of Labor Statistics, responsible for compiling the data, noted a slight uptick in the unemployment rate, from 4.3% in August to 4.4% in September. Revisions to job creation figures for the months of July and August were also disclosed, with July’s gains being adjusted down from 79,000 to 72,000, and August's originally reported gain of 22,000 being corrected to a loss of 4,000 jobs. These revisions cumulatively indicate that 33,000 fewer jobs were added during these two months than initially believed.
In the public sector, government payrolls experienced an increase of 22,000 jobs in September, offsetting a decline by the same number in August. This was primarily driven by the addition of 16,000 state government roles and 9,000 local government positions, despite the federal government shedding 3,000 jobs. Federal employment has witnessed a reduction of 97,000 jobs since January, with those on paid leave or severance still being counted as employed for survey purposes.
The private sector portrayed a mixed performance. The manufacturing sector recorded a decline of 6,000 jobs, slightly better than the LSEG economists' projection of an 8,000 job decrease. On a brighter note, the healthcare sector saw an impressive addition of 42,800 jobs, with contributions from ambulatory services and hospitals. The food services and drinking establishments sector also saw a robust gain of 36,500 jobs, and the social assistance sector expanded by 14,300 positions.
Conversely, the transportation and warehousing sector faced a reduction of 25,300 jobs, largely owing to decreases in warehousing and storage and courier services.
The labor force participation rate remained constant at 62.4% for the month of September, while the employment-population ratio held firm at 59.7%, albeit a slight decline of 0.4 percentage points from the previous year. Long-term unemployment persisted at 1.8 million, accounting for 23.6% of the total unemployed population. The number of part-time workers desiring full-time work remained steady at 4.6 million, and individuals holding multiple jobs rose by 17,000, making up 5.4% of total employment.
While the report is somewhat retrospective, not factoring in the effects of the recent government shutdown, it is considered to provide assurance that the labor market was resilient prior to the federal agencies' hiatus. Nancy Vanden Houten, lead economist at Oxford Economics, expressed that the data offers comfort in the labor market's stability before the shutdown, stating, "There is nothing in the data to warrant a change to our forecast for the Federal Reserve to leave rates unchanged at the December meeting."
The robust performance in September could be seen as a political victory for President Donald Trump, who has consistently emphasized the labor market's success as a testament to his economic policies. Analysts suggest that these positive figures could lend momentum to the Trump administration amid ongoing discussions concerning inflation, interest rates, and employment strategies.
