In this morning’s data, the economy added just 29,000 jobs in September, less than expected, and the previous month was revised lower. Reviewing the individual categories, the Health Care and Social Assistance industry was relatively strong, while the Information industry and Government Jobs were relatively weak. The Unemployment Rate ticked one-tenth higher to 4.2% as individuals were added to the workforce. Average Hourly Earnings increased 0.1% in September, less than expected, and grew 3.0% on an annual basis, one-tenth less than the previous month. The Labor Force Participation Rate was 61.8%, a bit higher than expected, and Average Weekly Hours were 34.4, the same as the previous month.
Overall, a mixed report showing some weakness as the increase in headline jobs was less than expected and the unemployment rate ticked slightly higher. Strength in payrolls in the health care industry was offset by some weakness in the information industry and the government. Average hourly earnings increased only slightly in the month, and the annual rate remains slightly below annualized inflation. Meanwhile, participation ticked slightly higher and average weekly hours were the same as the previous month.
The labor market is a bit weaker than previously thought based on this report, highlighting the ongoing hesitancy of companies to hire employees or to let workers go. Evolving immigration policies, the upcoming election, and elevated oil prices are all still playing a role in this dynamic. While the Fed may still be focused on elevated inflation, this report may keep the labor market more on their minds as they adjust policy. How well consumers and the economy hold up amidst this process will continue to be a key factor for markets in the coming weeks.
In all, the yield on the 10-year US Treasury ticks lower following the report and equity futures are higher as we head into the market open.
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