Jobs data is back! At least thru September

After last week’s end of the federal government’s shutdown, we are starting to see some of the economic reports that have been long-delayed. The biggest of which so far was released (today), showing what happened to the US jobs market two months ago.

The US economy added 119,000 positions in September, data from the Bureau of Labor Statistics showed Thursday, an unexpected boost to the labor market that has lately shown signs of a possible slowdown.

Wall Street economists expected a gain of around 50,000 positions, according to data from Bloomberg. While the September number beat economists’ expectations, revisions to prior months’ data showed August’s payrolls lost 4,000 jobs, compared to the previously reported gain of 22,000. July also showed a slightly smaller boost of 72,000 positions, instead of 79,000.

The unemployment rate, meanwhile, crept up to 4.4% in September, the highest level since October 2021, slightly exceeding August’s level of 4.3% and above the rate of 4.1% seen a year ago. The number of unemployed people grew slightly in September, reaching 7.6 million from August’s count of 7.4 million.

That’s surprising payroll growth, given that ADP had earlier reported a loss of 32,000 private sector jobs in September (later revised to a loss of 29,000).

I looked into the full jobs report, and I’ll note that 18,000 of the 119,000 jobs added were due to higher-than-normal hiring in education for state and local public schools, as well as private schools. And a lot of the rest of the 101,000 jobs were due to lower-than-normal seasonal layoffs in positions like construction contractors, retail trade, and leisure/hospitality. That may well reflect the fact that the payroll survey took place in the week after Labor Day, which may as well still be Summer these days. Let’s see if those “gains” get a snapback with the cooling weather of the next 2 months.

For the other stats, wages growth was “bleh”, at 0.246% overall and 0.254% for non-supervisory workers. Both failed to keep up with the 0.3% increase in inflation for September, which would mean a loss in real average hourly earnings for the 4th time in the 6 months measured after March, and a failure to gain for the 7th time in the 10 months measured since Trump was elected in November. Not good.

The unemployment rate rose for the “good reason”, with increases in labor force (+470,000), employment (+251,000) and unemployed (+219,000), so not a major alarm from that standpoint. But I’ll also add that the number of long-term unemployed continued to rise.

Which indicates to me that Americans who are being laid off are less likely to be quickly hired elsewhere. And that makes sense when you look the first release of unemployment claims information since the shutdown ended.

If you only went by the topline, it seemed to indicate things were still OK in mid-November.

In the week ending November 15, the advance figure for seasonally adjusted initial claims was 220,000, a decrease of 8,000 from the previous week's level. The 4-week moving average was 224,250, a decrease of 3,000 from the previous week's average.

But the increase in long-term unemployment reverberated in the UI claims report, as the number of Americans on unemployment hit a 4-year high.

The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending November 8, unchanged from the previous week's rate. The advance number for seasonally adjusted insured unemployment during the week ending November 8 was 1,974,000, an increase of 28,000 from the previous week's level. This is the highest level for insured unemployment since November 6, 2021 when it was 2,041,000. The 4-week moving average was 1,960,250, an increase of 6,750 from the previous week's average. This is the highest level for this average since November 20, 2021 when it was 2,004,250.

In addition, more federal employees were filing unemployment claims in October and early November due to the shutdown and Trump Administration layoffs that were done in response.

With over 34,400 additional federal employee claims vs last year, then combine with the seasonally-adjusted 1,974,000 figure of state claims (which do not count the federal employee claims), and we have exceeded 2 million continuing unemployment claims for the first time in 4 years.

Put it together, and you see a jobs market that was inconsistent but still growing in early September, while things seemed to be a bit worse 2 months later. We won’t see the October jobs numbers, since the government was shut down for the entire month, so we won’t see the 1-month effect of the 100,000+ federal employees that took part in the DOGE-related deferred resignation program, which took effect on September 30.

Those resignations won’t all show up in the unemployment claims info (although it appears some did), but we can look at November’s figures that come out next month, and get a good gauge of what effect that has had on the US jobs market overall. And I’d be surprised if unemployment isn’t higher in that November report, which would put us at the highest non-COVID/aftermath level since early 2017.

As more of these data points get released, it seems like things won’t show a crash as much as a slowdown in the economy where many areas are at or near recession, and Americans generally aren’t able to keep up with rising costs. We still haven’t seen how the consumer performed overall in September and October, other than anecdotal data from companies on their earnings calls, and that’ll be another indicator of whether things are just slower than what was going on this Summer, or if we are about to tip over into an outright decline.