U.S. Jobs: A Surprisingly Muscular September Showing

After seven months of job creation numbers lower than 300,000 — including 6 months of sub-250,000 performance, and one that came in just above 100,000 — the September jobs numbers came roaring back at levels not seen since mid-2022. The latest jobs report from the U.S. Bureau of Labor Statistics hit tallied a surprisingly robust 336,000.

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Not only that, but the overall tally from both of the preceding months was revised upward: July went up 79,000, from 157,000 to 236,000; and August rose by 40,000, from 187,000 to 227.000. That puts the three-month trailing average at about 267,000. As such things go, it's pretty respectable; as compared to last month's comparable average it's downright remarkable: The older numbers for June-July-August average out to 148,000.

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That means the trailing average jumped by more than 100,000 in a single month, and came up from levels not seen since the pandemic recovery first got underway. One more thing: Unemployment held steady at a low (but not record-low) 3.8 percent. Wow!

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Good News, Bad News

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This news is unfortunately a two-edged sword: On the one hand, it shows the job market continuing strong and growing, despite an uncertain political situation, continuing (but lower) inflation, and an increasing number of labor strikes (the actors are still out, now joined by the UAW and Kaiser Permanente health workers).

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Given all these downward pulls, continuing strength in job growth may tip the Fed back into raising interest rates some more, despite their recent pause. On a more positive note, wage growth (4.4 percent over the trailing year last month) is down slightly (4.2 percentover the trailing year this month).

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So at least one inflation driver appears to have its foot off the pedal, rather than rocketing upward — as sometimes happens when labor demand outstrips supply.

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Where's This Month's Action, Numbers-Wise?

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Looking more closely at job gains for September from the U.S. BLS details, here's what it shows:

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Leisure and hospitability grew by 96,000 jobs, about 150 percent of the trailing 12-month average of 64,000 jobs. Of that total, 61,000 went to food services and drinking places. That sub-sector has finally returned to pre-pandemic employment levels. Accommodations added 16,000 jobs, but still remains below pre-pandemic employment levels by 10.3 percent (217,000 jobs).

Government employment waxed by 73,000 jobs, almost 170 percent higher than that 12-month trailing average (43,000). Of that total, 29,000 came in state government education, and another 27,000 in local government (excluding education). Employment in this sector is not quite back to pre-pandemic parity — it's 9,000 jobs below those levels.

Healthcare jobs increased by 41,000, about 23 percent lower than its trailing 12-month average. Of that total, 24,000 went to ambulatory health care services, 8,000 to hospitals, and another 8,000 to nursing and residential care facilities.

Professional, scientific, and technical services jobs added 29,000 to their numbers, more or less on par with the 27,000 12-month trailing average.

Social assistance employment grew by 25,000 jobs, again just about hitting the 23,000 trailing 12-month average. Of that total, 19,000 went to individual and family services.

Transportation and warehousing increased only slightly, by 9,000 jobs. Truck transportation added that same amount, in partial offset of the previous month's 25,000 loss resulting from the Yellow trucking line's cessation of business in August. Air transport also added 5,000 jobs, but this sector is largely flat over the past year.

Information lost 5,000 jobs for the month, mostly owing to ebbing employment in motion picture and sound recording industries while the writers' strike continues. That sub-sector has lost 45,000 jobs since that strike began in May.

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Other sectors that the U.S. BLS tracks for this report were mostly unchanged in September, including: mining, construction, manufacturing, wholesale and retail trades, financial activities, and other services. Wages for the month are up by 7 cents from $33.81 to $33.88 per hour, showing 4.2 percent growth over the trailing 12-month period (as mentioned earlier in this column).

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Forecasts versus Published Counts

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As sometimes happens, the reported numbers differed widely from the prior consensus forecast as to where they'd come in. The forecast number of 170,00 turned out to be just over half the actual mark. This led labor economists to see today's jobs market as both "incredibly resilient" and as possessing "sustainable strength moving forward" (Nick Bunker, Economic Research Director at employment facilitator Indeed as quoted in The Washington Post).

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This is where the two-edge sword cuts both ways: Present performance and future strength may indeed sway the Fed to reconsider (and perhaps even impose) further interest rate hikes.

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On the other hand, the Post story also mentioned the workforce re-entry phenomenon as at least partly responsible for job growth remaining strong. This describes the increasing presence of job opportunities that persuade part-timers to switch to full-time roles, and for others who've been out of the workforce to come back into the fold.

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Though employment is flat for so-called "prime-age workers" (between 25 and 54 years old), it's up for cohorts both younger and older than this particular age range.

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For what it's worth, NPR takes more or less the same view on this latest report, headlining the jobs market as "stunningly strong" and mentioning growth in the various sectors that showed increases in the underlying U.S. BLS report.

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As you might expect tech industry association CompTIA zeroes in the information sector job losses, but stresses that, at 2.2 percent, tech sector and IT profession unemployment are still far lower than the overall 3.8 percent national average. Find the CompTIA Tech Jobs Report for September online for further details and statistics.

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Moving from Strength to Strength

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With the jobs market still showing and growing strong, it will be interesting to see how the usual uptick in seasonal jobs (mostly in hospitality and retail trade) impinges on the final reports for 2023. It's looking at least somewhat more likely that the year will conclude on something of an upward trend. Stay tuned!