Briefing.com: Nonfarm Payrolls

Updated: 02-Oct-20 09:21 ET

September Nonfarm Payrolls

Updated: 02-Oct-20 09:21 ET

Highlights

The September employment report was relatively disappointing. Granted the unemployment rate dropped to 7.9% from 8.4%, but the offset to that seemingly good news is that the labor force participation rate fell to 61.4% from 61.7%.
Additionally, the pace of job growth slowed considerably, the percentage of employees unemployed for 27 weeks or more rose considerably, and there was hardly any growth in average hourly earnings.

Key Factors

September nonfarm payrolls increased by 661,000 (Briefing.com consensus 800,000). The 3-month average for total nonfarm payrolls fell to 1.304 million from 2.677 million in August. August nonfarm payrolls revised to 1.489 million from 1.371 million. July nonfarm payrolls revised to 1.761 million from 1.734 million.
September private sector payrolls increased by 877,000 (Briefing.com consensus 814,000). August private sector payrolls revised to 1.022 million from 1.027 million. July private sector payrolls revised to 1.526 million from 1.481 million.
September unemployment rate was 7.9% (Briefing.com consensus 8.2%), versus 8.4% in August. Persons unemployed for 27 weeks or more accounted for 19.1% of the unemployed versus 12.0% in August. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 12.8%, versus 14.2% in August.
September average hourly earnings increased 0.1% (Briefing.com consensus 0.2%) versus 0.3% in August. Over the last 12 months, average hourly earnings have risen 4.7%, versus 4.6% for the 12 months ending in August.
The average workweek in September was 34.7 hours (Briefing.com consensus 34.6), versus 34.6 hours in August. Manufacturing workweek increased 0.2 hours to 40.2 hours. Factory overtime decreased 0.1 hours to 2.9 hours.
The labor force participation rate decreased to 61.4% from 61.7% in August.
The employment-population ratio increased to 56.6% from 56.5% in August.

Big Picture

The key takeaway from the report is that it will contribute to concerns that the labor market recovery process is becoming more arduous and that the risk of permanent job losses is increasing with the absence of a stimulus plan and lower aggregate demand at small businesses.