September jobs report preview: Labor market likely softened as Fed hikes take effect

[mahatmakanejeeves]

Yahoo Finance

September jobs report preview: Labor market likely softened as Fed hikes take effect

Alexandra Semenova · Reporter
Thu, October 6, 2022 at 4:38 PM · 4 min read

Job growth likely softened in September as a series of supersized interest rate hikes permeated the U.S. economy, but a softer non-farm payroll gain is still unlikely to deter policymakers from aggressive monetary action to fight inflation that remains at a decades-high.

The Labor Department is set to release its latest monthly jobs report at 8:30 a.m. ET on Friday. Here are Wall Street's expectations for the report, according to Bloomberg data:

Non-farm payrolls: +260,000 expected vs. +315,000 in August

• Unemployment rate: 3.7% expected vs. 3.7% in August

• Average hourly earnings, month-over-month: +0.3% expected vs. +0.3% in August

• Average hourly earnings, year-over-year: +5.0% expected vs. +5.2% in August

If economist estimates are realized, the projected payroll gain would mark the lowest monthly increase since December 2020. Any cool-off in September employment data would be a welcome sign for Fed officials trying to tamp down an extraordinarily tight labor market that has placed upward pressure on wages and contributed to soaring prices.

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On Thursday, data from the Labor Department reflected a spike in the number of Americans filing for first-time unemployment insurance. Initial jobless claims rose sharply to 219,000 for the week ended Oct. 1 after sliding to a five-month low of 193,000.

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[progree]

1. Hmm, almost exactly on as far as nonfarm payroll jobs, but UR down becuz labor force down

Non-farm payrolls: +260,000 expected vs. +263,000 actual

But unemployment rate: expected 3.7%, actual 3.5%

Big reason for that: Labor Force declined by 57,000

Labor Force = Employed + Unemployed

Unemployment Rate = Unemployed / Labor Force

Employed went up by 204,000, While Unemployed went down by 261,000

The Unemployed are jobless who have looked for work sometime in the last 4 weeks. Since they recently looked for work, they are counted as part of the labor force.

Its not good news that the Labor Force went down by 57,000 in September.

It's not good news that the Labor Force went up only 47,000/month on average over the last 6 months (since March)

Also, the Household Survey's Employed has only grown only 478,000 in the last 6 months (that's an average of only 80,000/month), as this widening disparity with the nonfarm payroll jobs grows increasingly larger.