Four stand-out points in the September U.S. jobs report
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[October 09, 2021] By
Dan Burns
(Reuters) - For a second straight month,
U.S. job growth proved to be bitterly disappointing in September, coming
in more than 300,000 jobs short of what many economists had penciled in.
That's after August's report initially came in almost half a million
jobs below economists' consensus estimate.
But the 41-page Bureau of Labor Statistics report features a vast
range of data on the U.S. job market, and there is plenty of fodder for
both the glass-half-full and glass-half-empty camps.
Not surprisingly, President Joe Biden cast his lot with the first group.
"Jobs up, wages up, unemployment down. That's progress," he said after
the release of the report.
Here are four data points that stood out.
UNEMPLOYMENT RATE DROPS
The unemployment rate fell for a third straight month and by much more
than was expected. Now at 4.8%, it is 10 percentage points south of its
peak level in April 2020. Most economists agree it is an imperfect
measure of the health of the labor market, but it still factors heavily
in both the average person's and typical policymaker's reckoning of the
economy, and it is improving at a pace not seen after most recessions.
In fact, the latest level is already where Federal Reserve officials on
balance had estimated it would be at the end of the year.
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NO MORE $300 A WEEK
Among the many superlatives in the September report, this one jumped off
the page: The ranks of the long-term unemployed, or those out of work
for more than half a year, fell by the most ever last month, with
560,000 people leaving those rolls. Why? Simple - the money ran out. A
$300 a week federal supplement to standard state jobless benefits
expired near the start of the month. The emergency program had been on
its way out since the early summer when 26 mostly Republican-led states
ended the benefits early. But the final cull occurred last month. The
question now is how many of those people transition back into the job
market in the months ahead.
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A delivery worker is pictured on the street in New York City, New
York, U.S., September 23, 2021. REUTERS/David 'Dee' Delgado/File
Photo
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WAGE INFLATION?
There's no shortage of anecdotes about employers enticing people back to work
with higher pay, but given how noisy the data has been during the coronavirus
pandemic, finding evidence of a real trend emerging has been challenging. The
Labor Department's average hourly earnings data, however, has settled down in
the past half a year and a new - and for now higher - growth pattern appears to
be emerging. Average hourly pay rose 0.6% last month - again more than expected
- and over the last six months has now averaged a gain of 0.5% per month. That's
roughly twice the monthly wage increase that prevailed before the pandemic.
SEASONAL ADJUSTMENTS
Schools reopened this year in far greater numbers than a year ago when vaccines
were still in the development stage and many public schools kicked off a year of
hybrid or fully online instruction. So why did public school employment drop by
144,000 last month? Answer: It didn't. And it's all the fault of "seasonal
adjustments." September is typically the strongest month for hiring at U.S.
public schools, with roughly 850,000 jobs added at the start of each school year
from 2000 through 2019. Then came the pandemic and September job growth at
public schools in the last two years was 15-20% below that trend - throwing off
the Labor Department's seasonal-adjustment models.
(Reporting by Dan Burns; Editing by Paul Simao)
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