Weak Numbers in Delayed Jobs Report, Uncertainty for Next Month

Following the delay caused by the government shutdown, the Bureau of Labor Statistics released the September jobs report today, showing 148,000 new jobs created and the unemployment rate essentially unchanged at 7.2 percent. Mercatus Center senior research fellow Keith Hall, a former BLS commissioner, said that the more important number—the labor force participation rate—has not recovered from its recent decline.

“After falling two months in a row, labor force participation held at 63.2 percent in September but it remains at a 35 year low. Progress in the recovery remains stalled as all of the drop in the unemployment rate so far this year (7.8 percent to 7.2 percent) comes from the declining participation rate. The better measure of labor market strength, the employment rate, remains unchanged for the year at just 58.6 percent of the working age population.

Although the first half of the year was the strongest first half since the start of the recession (with an average of 195,000 new jobs per month), job growth has slowed in the last few months. Coupled with today’s report, policymakers—including the Federal Reserve—may have concern with the labor market’s performance for the rest of the year. Further complicating things, the government shutdown could hinder the ability of the BLS to gather accurate data for the October report.”

Other key points from today’s report:

• As expected, nearly 1.5 million private and public workers in educational services returned from summer break and added about 30,000 jobs on a seasonally adjusted basis.
• Nearly 550,000 people in the leisure and hospitality and the tetail trade industries lost work at the end of the summer but contributed 7,800 to the job gains on a seasonally adjusted basis.