–Earnings Dip, Hrs Gain; Unemploy Dip Reflects More Part-timers

By Joseph Plocek

WASHINGTON (MNI) – The U.S. September employment data: another
month of declining unemployment for the wrong reasons, but with modest
payroll gains.

The September report was on the strong side on its face, with
payrolls printing +114,000 and the unemployment rate declining 0.3 point
to 7.8% as the labor force and participation rose.

But in the Household survey, Part-time workers for economic reasons
jumped 268,000 before seasonal adjustment and adjustment turned this
into +582,000. In turn this lowered the unemployment rate to its lowest
since January 2009.

The Bureau of Labor Statistics noted that the largest decrease in
unemployed (-206,000) was in the 20- to 24-year old cohort, which we
think is probably the sector that is least attached to the labor force.
These workers probably have the most flexibility in taking marginal
jobs. BLS also noted the monthly household survey employment measure “is
more variable” than payrolls since it stems from a far smaller sample.

In other words, declining unemployment might not be the defiining
factor in the report. But other measures also are on the upswing.

Average Hourly Earnings rose 7 cents to +1.8% over the year and
hours rose, suggesting incomes and production rose.

August-July payrolls were revised +86,000 on net.

September’s payroll composition showed some jobs stemming from
education and possibly temporary finance hires: manufacturing printed
-16,000, construction +5,000, retail +9,400, temporary jobs -2,000,
healthcare +43,500, transport/warehouse +17,100 (transit +9,200
possibly in a back-to-school result), finance +13,000, and government
+10,000 (local -9.200 ex education).

The big wing factor was that almost 1 million government jobs were
altered to just +10,000 in the usual September adjustment.

Bottom line: another not bad report but not yet a breakout, with
unemployment remaining high.

Details: Payrolls/Prior Pv AHE,yoy Agg Hrs Civ Unempl Rt/Unrnd
Sep +114k —- +1.8% 103.7 7.8% (7.7955%)
Aug +142k +96k —– 103.6 8.1% (8.1115%)
Jul +181k +141k —– 103.5 8.3% (8.2535%)

** MNI Washington Bureau: (202) 371-2121 **

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