Jobs Report Smashes Expectations

U.S. Employers add 254,000 jobs in September

This post is sponsored by Pivot Workforce. I wouldn’t accept a sponsor for this newsletter unless they were 1) a company I know and trust and 2) tackling an important problem like the construction industry's skilled labor shortages. Pivot checks both those boxes. Their goal is to help construction companies get the high-quality talent they need, and they have over three decades of experience staffing difficult-to-fill positions for some of the most recognized names in the construction industry. I urge any contractors struggling to find workers to give Pivot a look. 

U.S. employers added 254,000 jobs in September, exceeding the consensus forecast of about 140,000 new jobs. That’s the most in a single month since March, and employment for the previous two months was revised upward by a total of 72,000 jobs. 

The unemployment rate fell for the second straight month, down to 4.1%, and it fell for the right reasons—more people looking for work, a lot more people employed, and a lot fewer people unemployed.

By Sector

The manufacturing segment lost 7,000 jobs in September, with about 6,500 jobs lost at car manufacturing plants. We’ve known that the goods producing side of the economy is weak, so no real surprises here.

Other than that, every major industry added jobs for the month. Healthcare continued to lead the way, adding about 72,000 jobs, and restaurants weren’t far behind, adding more than 69,000.

Tech hiring (part of Information) bounced back a little bit, with employment growing by about 6,000 for the month. That remains one of the weaker segments, though.

As a final note, temporary help services (think staffing firms) lost another 14,000 jobs in September. Some view this as indicator of future hiring activity. I don’t. This segment has hemorrhaged jobs lately, and I think that reflects the fact that employees are having an easier time finding jobs, not looming labor market weakness.

What Do we Take from This?

The Fed will like this report because the lower unemployment rate gives them just a little more wiggle room to manage a soft landing. You should like it too.

That said, it’s just one month of data. It’s probably best to assume that the labor market is still gradually weakening, though I’ll gladly amend that opinion if we see a few months of solid job growth.

I still feel good about the economic outlook. Employers are hiring (albeit less than they were last year), inflation has slowed, and consumers keep spending. What’s not to like?

What’s Next?

Anirban’s Week in Review, our every Friday post where we concisely cover everything you need to know about the economy, will be out in the next couple hours. That’s just for paying subscribers. If that’s not you and you want it to be, just click the button below:

Want to see Anirban speak?

His 2024 presentation is Clint Eastwood themed. If you want him speak to your organization (either virtually or in person), just reach out to his assistant Julia at Jcomer@sagepolicy.com.