On Friday, October 7, the U.S. Bureau of Labor Statistics (BLS) reported that total nonfarm payroll employment increased by 156,000 in September. This was well below what economists were projecting.
The unemployment rate in the month of September remained unchanged from the previous month, at five percent. (Source: “Employment Situation Summary,” Bureau of Labor Statistics, October 7, 2016.)
The BLS also revised the July employment figure from 275,000 jobs originally reported to 252,000 jobs. August figures were revised higher from 151,000 jobs to 167,000 jobs. With these changes, job gains in the U.S. economy over the past three months have averaged 192,000 per month.
Investors and economists use the labor market statistics to examine the health of the U.S. economy. If more jobs are being added, it suggests there’s growth.
Looking more deeply into the U.S. labor market data for the month of September…
In September, 7.9 million individuals were unemployed in the U.S. economy. This figure has only changed slightly over the last one year. The number of people unemployed for less than five weeks stood at 2.6 million in September. Those unemployed for 27 weeks or more accounted for 24.9% of all unemployed persons.
The labor force participation rate for the U.S. economy stood at 62.9%. Since the great recession, this rate has declined significantly. It currently sits at the same levels it was at back in the late 1970s.
The number of Americans employed part-time for economic reasons stood at 5.9 million. This figure hasn’t changed much in a while. People working part-time for economic reasons are workers who would like to work full-time or their hours have been cut back.
A total of 1.8 million Americans were marginally attached to the labor force. These individuals are not considered to be in the labor force, but they wanted and were available for work, and had a job in the past 12 months.
A total of 533,000 of the marginally attached workers were discouraged workers. These workers are those who aren’t looking for jobs because they believe that none are available for them.
The underemployment rate, commonly referred to as “U6,” stood at 9.7% in September. This is an alternative measure of the U.S. labor market. This unemployment rate accounts for marginally attached workers as well.
In September, professional and business services sector employment increased by 67,000. Healthcare sector’s employment increased by 33,000.
On an interesting note, employment in food services and drinking places edged higher by 30,000 in September. Over the past one year, this sector of the U.S. economy has added 300,000 jobs. These jobs are usually considered to be low-wage jobs.
Since the great recession, it has been argued that low-wage jobs are prevailing, but the jobs that pay well are lagging behind.
As for wages, average hourly earnings for all employees on private nonfarm payrolls increased by $0.06 to $25.79. In the last one year, average hourly wages have increased by 2.6%.