Payrolls Scream Higher With Revisions, Unemployment at 5.9%
The Bureau of Labor Statistics (BLS) released the monthly Employment Situation Report for September on Friday morning. The official unemployment rate fell to 5.9%, versus the Bloomberg estimate of 6.1% and a prior initial reading of 6.1%. Friday's news is strong enough that the hawks could have a better argument for sooner-than-expected rate hikes.
Nonfarm payrolls were by 248,000, versus the Bloomberg estimate of 215,000. The previous reading was 180,000 in August after being revised from the preliminary low-ball number of 142,000. Also, July was revised higher to 243,000 from the last report of 212,000.
Private sector payrolls increased by 236,000, versus the estimate of 215,000. August's private sector payrolls reading was revised to a gain of 175,000 from the low-ball 134,000 originally reported.
The marginally unemployed, including those who are part time and discouraged, was down 0.2% to 11.8% in September. Still, the share of Americans in the labor force (labor force participation rate) remains near a three-decade low, falling to 62.7% from 62.8%. This helps to explain the big nominal drop in the unemployment rate. That figure was generally around 66% prior to the recession.
The average workweek ticked up to 34.6 hours from the previous reading and estimate of 34.5 hours. Average hourly earnings rose 0.2%, against an estimate of 0.2%.
The U.S. Department of Labor released the latest weekly jobless claims figures Thursday morning. The reading came to 287,000, which was below the Bloomberg consensus of 297,000. The weekly jobless claims for last week were revised to 295,000. Continuing claims, which lag by a week, fell 45,000 to 2.398 million.
ADP's September private sector payrolls came in at 213,000, above the 200,000 expected by Bloomberg. ADP said that private sector small business employment increased by 88,000 jobs from August to September. Of that group, businesses with one to 19 employees had 48,000 payrolls and businesses with 20 to 49 employees had 39,000 more payrolls in the month. Medium-sized businesses added 48,000 payrolls and large businesses added 77,000.
In the ISM Manufacturing PMI report, its Employment Index was 54.6%, a decrease from the August reading of 58.1%. That was still positive, but much less so.
Stocks were strong ahead of the report and they remain strong afterward. The only issue to consider here is that the news is above expectations and enough of a boost with the revisions that this could give the hawkish Fed members a feather in their cap to push for rate hikes sooner than mid-2015.
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