September jobs report paints another mixed picture

The U.S. economy added 136,000 jobs in September, while the unemployment rate fell to its lowest figure in 50 years, the Bureau of Labor Statistics (BLS) reported.

The jobless rate ended last month at 3.5%, a drop of 0.2 percentage points from the previous month. That’s an unemployment rate not seen since December 1969, when it also came in at 3.5%. The labor-force participation rate held steady from the previous month at 63.2%.

William Beach, BLS commissioner, reported that a number of industries saw upward employment trends. Health care employment grew by 39,000 jobs, professional and business services added 34,000 and government employment rose by 22,000.

The steady job gains and historically low unemployment led some economists to read the report as a signal of ongoing health despite continued trade turbulence and slackening international growth.

“Job gains of 136,000 and the unemployment rate falling to 3.5% are comforting signs that economic momentum remains solid even in an environment of greater uncertainty,” said Lawrence Yun, chief economist for the National Association of Realtors.

Still, the job market is slowing. September’s addition of 136,000 jobs is slightly short of forecasts and lower than the revised gain of 166,000 jobs in August. Several industries, including manufacturing, financial activities and information, were either flat or shed jobs on a monthly basis.

And after consistent private-sector job growth that averaged more than 170,000 additional positions per month from 2016 to 2018, the first nine months of 2019 have seen average monthly job growth of only 129,000. In fact, this year’s average job-creation pace of 160,000 (including both private-sector and government hires) is the lowest since 2010.

“A key takeaway from today’s jobs report is that things have slowed substantially in 2019,” tweeted Heidi Shierholz, former chief economist to the U.S. Secretary of Labor.

“Things appear to be slowing and the rate of decline continues,” Mark Zandi, chief economist for Moody’s Analytics, said in an interview on CNBC. “There’s no indication yet that we’re going to settle in at [monthly job gains of] 130 or 135 [thousand]. It feels like we’re going to throttle back even more than that and we’ll see that in subsequent months.”

The BLS report’s wage-growth data also presents cause for concern. On an annual basis, average hourly earnings rose by 2.9%, the weakest year-over-year gain since July 2018 and a lower-than-anticipated figure considering the record-low unemployment rate.

The housing market, by contrast, continues to flex some relative muscle, even as the employment picture persists in sending mixed signals.

Odeta Kushi, deputy chief economist for First American Financial Corp., said “the housing market, by many metrics, had one of its best months in August 2019, as it was buoyed by lower mortgage rates, favorable demographics and the continued growth in wages, which contributes to higher household income and stronger purchasing power.”

And despite slowing wage growth, Kushi noted that household incomes remain on the upswing.

“Add that to low mortgage rates and it’s a good boost for house hunters,” she said.


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