The unemployment rate in America was down to 3.5% in September, returning to its July level, while the number of unemployed persons edged down to 5.8 million in September, according to the latest report from the U.S. Bureau of Labor Statistics (BLS).
More Americans are working now than ever before, with 153 million on the payroll. The employment-to-population ratio is at 60.1% compared to 61.2% right before the onset of the pandemic.
The U.S. added 263,000 jobs in September, down from 315,000 in August. Notable job gains occurred in leisure and hospitality and health care.
Key findings:
- Job openings fell to 10.1 million in August, dropping below the 11 million mark that has held in recent months.
- The number of unemployed persons edged down to 5.8 million in September.
- The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.1 million in September.
- The number of persons not in the labor force who currently want a job was little changed at 5.8 million in September and remains above its February 2020 level of 5 million.
- In September, 5.2% of employed persons teleworked because of the coronavirus pandemic, down from 6.5% in the prior month.
- Hurricane Ian had no discernible effect on the employment and unemployment data for September.
- In September, 1.4 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic, down from 1.9 million in August.
- Leisure and hospitality added 83,000 jobs in September, in line with the average monthly job gain over the first eight months of the year.
- In September, employment in health care rose by 60,000 and has returned to its February 2020 level.
The takeaway:
“Wages rose by 5% to an average of $32.40 per hour,” said National Association of REALTORS® Chief Economist Lawrence Yun. “The workers in leisure and hospitality received a significant boost of 7.9% to $20.30, reflecting more acute shortages in this sector. However, higher pay does not mean an improvement in the standard of living because consumer prices are rising at 8%.
“At the same time, the bond market is not liking it because it now expects more aggressive interest rate increases by the Fed. Mortgage rates, likewise, will test new highs. Construction and general contractor jobs also expanded, though these lean more toward the commercial building of warehouses and apartments and less building of single-family homes. Though there has been some return of housing demand closer to the city recently, the long-term trend could be in the outer suburbs.”
“Slowed employment gains reflect the ongoing monetary tightening efforts of the Fed, who raised the federal funds rate 75 basis points in September, further notching up the cost of borrowing,” noted realtor.com® Economic Data Analyst Hannah Jones. “The Fed has continued to emphasize its goal of targeting still-high inflation, which was 8.3% in August, in an effort to return prices to a healthy level.
“The labor force participation rate remained fairly steady at 62.3%, still below the pre-pandemic level of 63.4% as some Americans have remained out of the labor market. Job searcher sentiment showed a significant shift, as the number of discouraged workers, a measure of workers who would like a job but are not searching and believe no jobs are available for them, increased from 119,000 to 485,000 in September.
“Overall, the labor market remains strong with low unemployment and sizable job growth. However, home shoppers are feeling the pressure with mortgage rates climbing toward 7%, still-high home prices, sustained inflation, and wage increases failing to keep up with rising costs. The tight labor market may offer home shoppers flexibility by opening up job and home buying possibilities. Buyers can aim to expand their budget by targeting a higher-paying job or may consider taking advantage of remote work arrangements and relocating to a more affordable area.”
“While the pace of growth slowed in September to 263,000, this is still faster than can be sustained in the U.S. economy over time,” expressed Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni. “And other data clearly signaling a slowing economy lead us to forecast a sharp drop in job growth over the coming months.
“The unemployment rate dipped back to equal the pre-pandemic low, and wage growth remains strong with average hourly earnings up 5% over the past year. The household sector is in strong shape, which should help to mitigate the extent of an economic downturn.
“The number of job openings decreased in August sharply. This does suggest that employers are first moving to eliminate those openings and slow the pace of hiring before turning to layoffs as the economy cools.
“We expect the Federal Reserve will increase rates by at least another 50 basis points in November and could do more if inflation fails to decelerate.”
