Tag: US Labor Department

Three Positive Takeaways from September’s Employment Report

Posted on by scott.hodges

Recent economic data highlights a surprisingly strong trend in job growth, bringing optimism to the business landscape. In September, the U.S. economy demonstrated remarkable resilience, with employers adding 254,000 jobs—well above economists’ expectations of 150,000. This robust growth coincided with a drop in the unemployment rate to 4.1%, indicating a tightening labor market.

This surge in job creation has reinforced confidence in the U.S. economy’s strength, countering concerns of a potential slowdown and underscoring the continued vitality of the labor market across various sectors.

A key highlight of this report is the broad-based nature of job growth. Restaurants, retailers, and construction companies all contributed to the employment gains, signaling a widespread recovery. Additionally, revisions to July and August figures added another 72,000 jobs to previous estimates, further emphasizing the job market’s strength. Although job growth has slowed since the first quarter, it remains solid, with an average of 186,000 jobs added monthly over the past three months.

Another encouraging development is the ongoing expansion of the U.S. labor force, which grew by 150,000 individuals in September. This increase is largely driven by immigration, with the foreign-born workforce rising by 1.4 million over the past year. The influx of new workers has been essential in sustaining job growth, particularly as the native-born workforce shrinks due to the retirement of baby boomers. Furthermore, workers are seeing real gains in purchasing power, with average wages increasing 4% year-over-year, outpacing inflation and extending a 15-month trend of wage growth exceeding price hikes.

These positive employment figures have broader economic implications. The 4% rise in average hourly earnings may bolster consumer spending, while the strong labor market could influence the Federal Reserve to take a more cautious approach to interest rate adjustments. Overall, the September jobs report strengthens confidence in the U.S. economy’s resilience, easing recession fears and supporting the possibility of continued growth and stability in the months ahead.

Economic Recovery? Are We Getting There?

Posted on by scott.hodges

During the first coronavirus wave in the spring, approximately 22 million Americans had no work.  While a couple of months after that saw somewhat of an economic rehabilitation (thanks to record low interest rates and stimulus money) with the second wave things are plummeting further than the initial pandemic attack.  According to High Frequency Economics Chief US Economist Rubeela Faroqi said:

“The layoffs are an additional headwind in an already weak labor market. As long as the virus isn’t contained, this is going to be an ongoing phenomenon.”

Businesses are being forced to reduce costs as demand for services in many industries is weakening. Consumer spending on goods on the other hand is increasing. People are eating and drinking more (short-term) and appliances (longer-term). Personal spending has increased (by about a percentage) and consumer confidence readings has expanded a little too. Between June and August there was a 2.1 percent jump in residential construction employment.

Still, there are way too many Americans still filing for unemployment.  According to the Jobs Report put out by the US Labor Department, what was witnessed in September in labor market gain, is now beginning to dwindle with only an additional 661,000 jobs added in the  month.  August for example, saw an additional 1.5 million jobs.

Personal income fell in August and the growth in consumer spending was slower than it had been.

So it seems like the messages we are receiving are not straightforward at all and coming to any conclusion regarding the economic recovery is hard to measure.