The job market held steady in September, which probably means that voters will head to the polls next month amid an economy that is in solid but not spectacular shape.
U.S. employers added 156,000 jobs in September, the Bureau of Labor Statistics said Friday. That’s a touch weaker than in August, when they added 167,000 jobs, and a bit below economists’ expectations. But such month-to-month fluctuations mean little (and in any case are likely to change in future revisions). The big picture looks pretty much the same as it has for the past year: Job growth has slowed a bit from its breakneck 2014 pace, but remains solid. The U.S. has added jobs for a record 72 straight months, and has gained more than 14 million jobs over that span.
The details of the report were better than the headline numbers suggest. Hourly earnings rose as the tightening labor market forced companies to pay more to attract or retain workers. And the improving job market is drawing Americans off the economy’s sidelines: The labor force grew by 444,000 people. Both trends suggest that the recovery is finally reaching those hurt most by the recession.
Still, the new figures probably weren’t strong enough to dispel unease about the economy among many voters. Friday’s jobs report is the last that is likely to have much effect on the election — the government will release October’s figures on Nov. 4, four days before Election Day — and it probably amounted to a “push” politically. Hillary Clinton can point to continued job growth and rising wages; Donald Trump can emphasize the slowing pace of hiring and an uptick in the unemployment rate. FiveThirtyEight’s election model considers the economy to be more or less neutral in terms of its impact on the election; Friday’s report isn’t likely to change that.
Here are a few more observations from Friday’s report:
Unemployment up for “good” reasons: The unemployment rate ticked up to 5 percent in September from 4.9 percent in August, but that isn’t necessarily a bad thing. The government only counts people as “unemployed” if they are actively looking for work, which means the unemployment rate can rise if people who were neither working nor looking for work — stay-at-home parents, students, or people who’d given up trying to find jobs — decide to start searching again. That’s what happened in September: Friday’s report shows a big increase in both the number of people working and the number looking for work. There was a particularly big increase in the number of people who entered the labor force as unemployed, meaning they started looking for jobs. That’s a sign of confidence in the economy. And just as importantly, when people look for jobs, they’re finding them: One in four unemployed workers found jobs last month, the highest rate since January.
All those people entering the job market pushed up the labor force participation rate — the share of adults who are either working or looking for work — to a six-month high. The participation rate plunged during the recession as people gave up looking for work, and it continued to fall for much of the recovery, partly due to the aging of the baby boomers. But now it is beginning to rebound, a sign that the improving economy is attracting new workers to the job market.
Help wanted: Employers, meanwhile, are being forced to work harder and pay more to attract workers. Average hourly earnings are up 2.6 percent over the past year, significantly faster than inflation. Wage growth has been slow during the recovery, but lately it has been steady and may even be accelerating. Meanwhile, companies asked their employees to work more hours in September, a sign they are trying to get more work out of their existing employees amid a tight labor market.
Good jobs, bad jobs: One persistent concern in the recovery is that the jobs being created aren’t “good” jobs — they are disproportionately low-wage, part-time or temporary. That hasn’t really been true in recent years: Job growth has been strong at both the top and bottom of the earnings spectrum, with the middle lagging. September was a mixed bag: The generally low-paying retail and hospitality sectors added jobs, but so did the better-paying professional services sector. Manufacturing, a key source of decent jobs for less-educated workers, lost jobs, but the construction sector added them. Meanwhile the number of Americans working part-time because they couldn’t find full-time work fell, mostly reversing an unexpected increase over the previous two months.
