The Bureau of Labor Statistics just released the September jobs report and it pleasantly surprised to the upside. The consensus was for an increase of 210,000 but it came in at 248,000. The past two months were revised to the upside by about 70,000 so the net is a monthly increase of 318,000. This is a good report, not a great report because hours worked and hourly earnings are still stagnant and the labor force participation rate is still the lowest since 1978.
Let's take a look at the internals because that is what drives our analysis, hourly earnings were flat as mentioned but weekly hours worked was 34.6 vs last month's 34.4. Employers are still not paying their employees more but did give them slightly more hours. We need both to happen, hours worked and wages to increase, employers don't want to hire more people because they have learned to do more with fewer people but also they fear Federal regulations if they do. The labor force participation rate is at almost 40 year lows, part of that is because of a population growing older but part is because so many long term unemployed people are dropping out of the labor force because they are so discouraged with the job market. If the participation rate was the same as last month, the unemployment rate would have stayed at 6.1% rather than the 5.9% that was reported this morning. In September, 97,000 people dropped out of the job market, so of these people may never make it back to full employment like they used to have.
The confusing part of the story is that this a good report but not as good as we would like, 400,000 a month for a string of months with wages and hours worked increasing is what we need. The President said on "60 Minutes" last week that the country is better off than when he took office but also acknowledged that most the majority of Americans don't believe it. This is my belief as well, studies show that more seniors are working longer than they have in past years in order to make ends meet. It begs the question of how really strong this economy is and how it translates into the fall election. Will Americans believe the 5.9% unemployment rate and believe things are good or look at their pocketbook and job prospects and hit the re-set button.