U.S. Jobs: New Jobs, Unemployment Both Go Down in September

The 137,000 jobs added for September is boosted somewhat, on average, by top-ups for both July and August. The July numbers went from 147,000 to 165,000, an increase of 18,000 (11 percent). August numbers really spiked though, up from 201,000 to 270,000, an increase of 69,000 (more than 25 percent).

All told, job gains for the past three-month period still average 190,000, which is somewhere between "decent" and "pretty good" job growth overall. A quick look at the unemployment rate for 2018, however, shows a somewhat bumpy decline from a high of 4.1 percent in January and February — already low by usual standards — to the current historic low of 3.7 percent for September.

More Report Details Show Where Jobs Are Growing ... and Stagnant

Labor force participation held steady in September at 62.7 percent, while the employment population ratio of 60.4 percent was mostly unchanged as well. This month's job uptick of 137,000 is significantly lower than the 12-month trailing average of 201,000 (by more than 31 percent). Where did those modest job gains occur?

Three sectors experienced the bulk of that job growth — namely, professional and business services, health care, and transportation and warehousing. Professional and business services accounted for a major chunk, with 54,000 such jobs added in September (and 560,000 for the year so far, which puts September under that monthly average of 62,000 or so).

Source: U.S. Bureau of Labor Statistics

Health care was up by 26,000 for September (with 302,000 such jobs added for 2018 so far, that's a monthly average of 33,500 or thereabouts). Transportation and warehousing increased by 24,000 for September, which is ahead of the monthly average for 2018 of just over 19,000 (174,000 such jobs added for 2018 so far).

Other sectors that gained jobs included construction (+23,000), manufacturing (+18,000) and mining (+6,000). Leisure and hospitality declined by 17,000 for September, and the BLS report speculates that this may be an impact from Hurricane Florence.

The rest of the major industries and sectors in the U.S. economy — wholesale and retail trades, information, finance, and government were mostly flat.

What About Wages?

Wages continue to show modest growth. Average hourly earnings were up by $0.08 an hour to $27.74 for September. For the year, average hourly earnings are up 73 cents, which translates into a 2.8 percent growth rate for wages. With the current U.S. inflation rate at 2.7 percent, wages are just barely if not imperceptibly ahead of that rate.

Thus, I don't think it's unreasonable to characterize wage growth as somewhere between none and extremely slim. Clearly, this is an area that must increase for Americans to feel better about how they're doing financially and personally, especially for those living from paycheck to paycheck.

Table A-14 and the Information Sector

From time to time, I like to take a look at Table A-14 in the Employment Situation Summary, and see how the information sector is faring. The contrast with last year is pretty interesting. In September 2017, the unemployment rate in Information was 5.1 percent with 141,000 information workers officially unemployed. That translates into a sector size of 27.6 million, give or take.

For September 2018, the unemployment rate dropped to an low 2.7 percent with 62,000 information worked officially unemployed. That puts the current sector size of just under 23 million. I'm struggling with these numbers because that would indicate a reduction of 4.6 million information jobs over the past year. This just doesn't square with my perception or understanding of what's going on in the workplace.

In fact, CompTIA's IT Employment Tracker (as I write this, their October report isn't out yet, so I use their September numbers as a point of comparison) puts the size of overall IT employment in the United States at 4.56 million for IT Sector Employment (those who work for IT companies) and 5.11 million for IT Occupation Employment (those who work in other industries doing IT jobs).

This totals up to 9.67 million IT-related jobs in September 2018, a total that's stayed pretty steady since October 2016, with a variance of no more than 0.9 million for both charts combined for that entire period. It's just weird that CompTIA's metrics tell such a different story about IT employment, and also show a steady if not dramatic increase in combined overall IT employment over the past two years.

That's why I'm pretty sure the IT workforce, however you measure it, hasn't experienced a 17 percent decrease over the past year, no matter what the BLS numbers may indicate. Very strange!