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Comments on September Employment Report

by Calculated Risk on 10/07/2022 09:40:00 AM

The headline jobs number in the September employment report was slightly above expectations, and employment for the previous two months was revised up by 11,000, combined. The participation rate decreased, pushing down the unemployment rate to 3.5% – equaling the lowest unemployment rate since 1969! And the employment-population ratio was unchanged.

Leisure and hospitality gained 83 thousand jobs in September. At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.20 million jobs, and are now down 1.14 million jobs since February 2020. So, leisure and hospitality has now added back about 86% all of the jobs lost in March and April 2020.
Construction employment increased 19 thousand and is now 95 thousand above the pre-pandemic level.
Manufacturing added 22 thousand jobs and is now 163 thousand above the pre-pandemic level.
Education: As expected, fewer educators than usual were hired in September, and this resulted in a seasonally adjusted loss of 29 thousand jobs education jobs.
Earlier: September Employment Report: 263 thousand Jobs, 3.5% Unemployment Rate

In September, the year-over-year employment change was 5.69 million jobs.

Prime (25 to 54 Years Old) Participation

Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 participation rate decreased in September to 82.7% from 82.8% in August, and the 25 to 54 employment population ratio decreased to 80.2% from 80.3% the previous month.

Both are close to the pre-pandemic levels and indicate almost all of the prime age workers have returned to the labor force.

Part Time for Economic Reasons

From the BLS report:

“The number of persons employed part time for economic reasons decreased by 306,000 to 3.8
million in September. These individuals, who would have preferred full-time employment,
were working part time because their hours had been reduced or they were unable to find
full-time jobs.”

The number of persons working part time for economic reasons decreased in September to 3.843 million from 4.149 million in August. This is below pre-recession levels.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 6.7% from 7.0% in the previous month. This is down from the record high in April 22.9%, and matches the lowest level on record for this measure since 1994. This measure is below the level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.067 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.137 million the previous month.

This is back to pre-pandemic levels.

Summary:

The headline monthly jobs number was slightly above expectations and employment for the previous two months was revised up by 11,000, combined.

The headline unemployment rate decreased to 3.5%.
Overall, this was another solid employment report.

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