Hiring slows in September, while workers keep looking

American employers added 29,000 jobs in September, a modest gain that also arrived with a weaker account of the summer. Friday’s Labor Department report cut the combined July and August payroll estimates by 60,000. The unemployment rate edged up to 4.2 percent. For people looking for work, the report offered little evidence of a broad hiring acceleration.[1]

Yet the increase in unemployment did not describe a sudden wave of people losing their jobs. St. Louis Federal Reserve researchers found that the unrounded rate moved from 4.141 percent to 4.175 percent—about three hundredths of a percentage point. Rounding made that small movement appear as a full tenth in the familiar headline. Their analysis also found unemployed people finding jobs at a higher-than-average rate, alongside fewer leaving the labor force. Those movements push the rate in opposite directions.[2]

Payroll growth averaged about 51,000 a month over July, August and September, using the revised figures: a decline of 10,000, a gain of 133,000 and the latest 29,000 increase. Average hourly earnings rose 0.1 percent in September and 3 percent over twelve months. Health care continued adding jobs, although at a slower pace than its preceding twelve-month average. BLS described employment in the major industries as little changed.[1]

Two measures of work

The payroll count and the unemployment rate come from different surveys. Employers report jobs for the payroll survey. Households report whether people are working, looking for work or outside the labor force. Someone with two payroll jobs can count twice in the first measure and once in the second. The household measure also includes groups, such as the unincorporated self-employed and agricultural workers, that the payroll measure excludes.[3]

Both are estimates, and monthly changes carry sampling uncertainty. BLS puts the approximate threshold for a statistically significant monthly employment change at 122,000 in the payroll survey and 650,000 in the household survey, at the 90 percent confidence level. That does not make a smaller reported change meaningless. It makes a single month a poor basis for declaring an exact turning point. The broader run of releases deserves more weight than an apparent precision the survey cannot provide.[3]

The St. Louis researchers judged September’s overall conditions similar to recent months and healthy by historical standards. That is their interpretation, and it can coexist with a frustrating search for an individual applicant. An unemployment rate is an aggregate outcome of people entering, leaving and finding work. It does not measure how easily a particular person can secure the hours, pay or occupation they want.[2]

Hiring and layoffs move separately

The earlier job-openings report provides another view. In August, employers made about 5.2 million hires while roughly 5.1 million workers left payrolls. About 3.1 million departures were quits; 1.6 million were layoffs or discharges. These large flows run underneath the much smaller net employment change. A labor market can keep most existing workers employed while offering limited movement to people seeking a new position.[4]

Employers reported roughly 7.1 million openings at the end of August. That figure describes positions open on the month’s last business day, while hires count movements throughout the month. It would therefore be misleading to subtract hires from openings and call the difference unfilled opportunities that employers refused to fill. The two measures have different timing and definitions. They are useful together as evidence of recruiting and movement, not as interchangeable counts.[4]

The most recent weekly claims report also showed no abrupt increase in benefit applications. Initial claims were 197,000 for the week ending September 26, down 1,000 from the revised preceding week. Their four-week average fell to 200,000. Seasonally adjusted continuing claims were about 1.7 million for the week ending September 19. These are administrative measures of benefit claims, with different reference weeks from the September jobs survey; they are not a count of everyone without work.[5]

The inflation problem remains

The report reaches policymakers after the Federal Reserve raised its target interest-rate range by a quarter point in September, to 3.75–4 percent. The committee then described spending as resilient, investment as robust and inflation as elevated. Its stated aim was a timelier return to its 2 percent inflation goal. Slower hiring is relevant to that balance, but Friday’s employment report is evidence for the next decision, not an announcement of what the Fed will do.[6]

The price and spending data remain mixed. In August, the personal consumption expenditures price index rose 3.4 percent from a year earlier; excluding food and energy, the increase was 3 percent. Inflation-adjusted consumer spending rose 0.6 percent over the month, while inflation-adjusted disposable income was unchanged. Households were still buying more in aggregate, even as their current purchasing power did not increase by that measure.[7]

The immediate picture is a hiring market with little momentum, benefit claims that have not surged, and an economy still contending with rising prices. A sustained increase in claims would strengthen the case that employers are shedding workers. A revival in hiring would give applicants more room to move. For now, neither a single payroll number nor a tiny change in rounded unemployment supplies that answer on its own.[5][7]