After all the mixed data this week it turns out that the labor market is still churning along and even created more jobs than economists were expecting, according to the September jobs report.
- Total nonfarm payroll employment increased by 263,000 and the unemployment rate edged down to 3.5% in September, this was the lowest monthly increase since April 2021 but it did beat economist projections of 250,000.
- So far in 2022 the economy has created 3.76M jobs and is averaging 420,000 a month.
Breaking It Down. Leisure & hospitality continues to hold the top spot with 83,000 new jobs in September, this is in line with the average monthly job gain over the first 8 months of the year. However, the industry remains below its pre-pandemic February 2020 level by 1.1 million.
- Health care took the number two spot with 60,000 jobs followed by professional & business services (+46,000), manufacturing (+22,000), and construction (+19,000).
Wages. Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3%, to $32.46. Year-over-year wages are now up 5.0%.
- Currently, the Consumer Price Index stands at 8.3% which means that real wages are continuing to fall.
Revisions. No big changes this month. July was revised up by 11,000 to 537,000, and August was unchanged at 315,000.
Analysis. Neil Irwin at Axios says this is “Certainly a 75-bps-hike-in-November kind of report.” He also argued the jobs market is holding steady. “Basically: The labor market remains robust, for better (pretty much anybody who wants a job can get one), and worse (inflationary pressures/excess demand are still there).”
BOTTOM LINE: AS long as the jobs report keeps beating expectations the Fed is going to keep hiking.