We've seen a lot of strong macroeconomic numbers for August, including an initially reported gain of 162,000 jobs in that month. But gas and especially diesel prices kept spiralling higher in September, and it made Friday's jobs report one of the first indicators as to whether things had changed as Summer ended.
It now looks like August's big gains were a fluke, and
September now has fewer jobs reported than what was reported for the previous month. The US labor market hit a soft patch in September as the economy added just 29,000 jobs and the unemployment rate increased to 4.2%, new Bureau of Labor Statistics data showed Friday.
The latest jobs report – and the final official employment snapshot before the midterm elections – also showed that recent months’ hiring was weaker than previously thought and that wage growth slowed, putting Americans’ paychecks further behind the 8-ball at a time when inflation has accelerated.....
September’s job gains marked a slowdown from August, when a downwardly revised 133,000 jobs were added. (Economists had previously cautioned that August’s surprisingly strong gains likely reflected some seasonal factors that overstated hiring activity.) In addition, July turned negative, with 10,000 jobs lost (previously a 21,000-job gain).
Well that's no good, and when you average these numbers out over three months, we're back to the tepid levels of job growth that we have had for most of 2026.
But one positive in this report is the continued growth in construction jobs in September (+11,000), and manufacturing has also been reporting gains in jobs recently (+9,000).
On the flip side, how lousy would the US jobs market be if we didn't have all these AI data centers pumping up construction jobs (and what happens when that Bubble inevitably pops)?
Moving over to the household survey that determines the unemployment rate, we had a slight nudge up from 4.1% to 4.2%. But that was for the "good reason", as the labor force grew by a (seasonally-adjusted) 485,000 and the number of people employed was up by 406,000. However, I'd add that the gains in the last 2 months seem to be a regression from the big declines we saw earlier in the Summer, and the number of people participating in the labor force and working is merely back where things were 6 months ago.
But to me, the bigger story came later in the jobs report. And it was the continuance of a bad trend.
That's the 12-month growth in average hourly wages, and it's down to 3.0% after a lame 0.1% increase in September. That puts us back in pre-2020 levels of wage growth with much higher inflation than we had in the 2010s. And do you see that getting any better any time soon? Me neither.
I'm not overly concerned with what I saw in the US jobs report for September from the payrolls and unemployment rate. It just confirmed we're still in this "low fire, low hire" mode that we've been in for most of Trump 2.0. But the lack of wage growth means that Americans fell even further behind in September as regular gas surged well past $4 at the pump, and you'd have to think that Republicans are going to feel the anger from those voters that are having any economic advancement be further out of reach, no matter if they still have their jobs.
