September Jobs Report shows modest increase, yet is bright spot in otherwise drab U.S. economy

U.S. Secretary of Labor Thomas Perez

Friday’s release of the September Jobs Report showed only a modest gain of 156,000 jobs to the U.S. economy, far less than the 170,000 that many economists and bankers had predicted. With some calling it “blah”, and others reiterating the word “modest” and still others “tepid,” it seems that while the economy is adding just enough jobs to keep up with population growth, the pace is slow enough that the Federal Reserve will hold off from a rate increase.

The report showed the smallest gains since May, and the only bright spot seems to be the labor force participation rate, but that also grew by an equally modest half point. There is some evidence that the decreased unemployment rate of 5 percent, reflects an increased desire for work. Or, so says U.S. Secretary of Labor Thomas Perez who said “this says that 3 million more people have found, or are out looking for a job.”

Wages have also grown only so far --- 2.6 percent to year’s date --  and while showing some improvement, the steady inching has not grown, as predicted, yet some say, that this might be reflected in increasing holiday this coming season, if not in overall consumer spending, (an index of a healthy economy), and retailers are gearing up for a healthy holiday season..

What is not predicted is whether there will be the mammoth sales and discounts that have trained most consumers to only shop during deep discounting, thus affecting any glad tidings of the holiday balance sheet.

Last month’s assertion by both the anecdotal information of the Beige Book, and other indicators have shown that the historically low interest rates, designed to help households spend and invest, has not been seen, and inflation has yet to reach the 2 percent marker that is the Fed’s benchmark.

Some, however, are sanguine, like Harry Holzer, a Georgetown professor of public policy, who says, this is “a slow but steady improvement” and a “gradual tightening” of the employment market.

Wages, have, however, shown a modest increase averaging $25.79 in the private sector, up 6 cents, and 0.2  percent from the previous month; and, an overall 2.6 over the prior year’s number.

Labor market participation reached 62.9 percent in September, representing a 1/10th point increase from August, and a half point from a year earlier, but it’s the lowest level since 1970; and, some are attributing this to retiring baby boomers, and those who gave up looking for work.

The figures is also not reflective of those who are underemployed, jobless, work part time, and would prefer full time.

Who are the winners this time around? Professional and business services are once again leading the pack, with increases of 67,000, followed, by healthcare, with another strong showing this month of 33,000, as food services inched up by 30,000 jobs.

Oil and gas continued their downward trend with 13,000, along with mining, undoubtedly due to cheap natural gas and the demise of coal, as king. Manufacturing has also sustained a decline with lowered oil prices, and a strong U.S. dollar.

Despite the lowered expectations the jobs report is the bright spot in an otherwise dismal economy, one that low inventories, according to one analyst, is the culprit.in the lack of significant growth.

Most observers and industry analysts are looking closely at this report for any changes, since it is the last one that can be analyzed, with any depth, before the November 8th presidential election. And, whoever the winner is, they will come to office with an economy that is still sluggish after the Great Recession, and crawls to rectify itself, despite brighter increases in employment.