The Line: September Job Growth Much Higher than Expected

This week, we finally have a BLS Employment report, but unfortunately it’s for September. Welcome to the “you get what you get, and you don’t get upset” edition of The Line.

September Job Growth Much Higher than Expected

Payrolls rose by 119,000 in September, which easily crushed the50,000 Dow Jones estimate.

Here are the other highlights of the report:

• The BLS will not be publishing an October report, as some of the data cannot be collected retroactively.





• The unemployment rate ticked up to 4.4% from 4.3% in August. September’s rate is the highest since October 2021.





• July and August job growth was revised down by a total of 33,000.





• Wages in September were 3.8% higher than a year ago.





• September job growth was led by health care (+43,000) and restaurants and bars (+37,000).





• Federal government employment declined by 3,000 and is down 97,000 since January.





• Overall, this was a pretty solid report with higher-than-expected job growth. The household survey showed an even larger gain than the payroll survey, with employment up by 251,000. Wages continue to outpace inflation, and the downward revisions to July and August weren’t that large. We also received the latest data on weekly jobless claims, which were 220,000 last week, a very low number.

Now that we’ve got the happy stuff out of the way, here’s why we shouldn’t celebrate too much:

• This data is from September.





• ADP’s report had private sector employment down 29,000 in September, so don’t be surprised if the BLS revises its number downward.





• We don’t know the lasting impact the government shutdown will have on private and government employment. The director of theNational Economic Council said the shutdown may have cost thecountry around 60,000 private sector jobs.

To sum up, while job growth was solid in September we won’t really know how strong the labor market is until theNovember report is released on December 16. Unfortunately, that’s after the Fed’s meeting, so it’s hard to predict what they will do. Right now, markets have the odds of a rate cut next month at around 40%.

Have a great Thanksgiving.