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A Very Good Jobs Report

At first blush, the September jobs report from the Labor Department seems a disappointment. The…

  • October 19, 2018

At first blush, the September jobs report from the Labor Department seems a disappointment. The economy produced just 134,000 jobs during the month – well shy of the 185,000 economists had expected. But a closer look exposes some very strong trends.

For starters, the unemployment rate – at 3.7% — is the lowest it’s been since December 1969.

Wage growth, while not spectacular at 2.8% year-over-year, was still strong enough to meet Wall Street expectations.

And while 134,000 jobs in September was lackluster, consider that the August tally has been revised upward, from 201,000 to a massive 270,000 jobs added. This helps bring the 12-month average gain to over 200,000.

Among the major worker groups, the unemployment rates for adult women (3.3 percent) and Whites (3.3 percent) declined in September. The jobless rates for adult men (3.4 percent), teenagers (12.8 percent), Blacks (6.0 percent), Asians (3.5 percent), and Hispanics (4.5 percent) showed little or no change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.4 million over the month; these individuals accounted for 22.9 percent of the unemployed.

In September, the labor force participation rate remained at 62.7 percent, and the employment-population ratio, at 60.4 percent, was little changed.

So, the decline in unemployment did not come from a shrinking workforce, as has been the case in the recent past. This is very good, since an increasing workforce and declining unemployment signal a tightening labor market. This could help push wages higher still in the months ahead.

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