The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for September 2023 on Friday, October 6th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.
Employment in the U.S. rose steeply by 336,000 jobs. The job results were more than double the expectations of Geographic Solutions, Inc. (153,000) and the Wall Street Journal Economist Survey (170,000). Geographic Solutions derives its employment forecast from internal data on the number of job openings, job applications and job severances, and unemployment applications filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).
The unemployment rate stayed at 3.8% in September, matching the Geographic Solutions forecast. The WSJ forecast projected the unemployment rate would tick down to 3.7%. The unemployment rate forecast uses internal data on the number of job openings, job applications, job severances, job searchers, and unemployment applications filed on Geographic Solutions state client sites.
Job creation was strongest in the Leisure & Hospitality (96,000), Government (73,000), and Education & Health Services (70,000) sectors. Other sectors were modestly positive, and none had major job losses.
Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment levels. However, Government appears ready to surpass that level within the next two months.
The labor force participation rate stayed at its post pandemic high of 62.8% in September. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment fell to 7.0%.
Employment was quite a bit stronger over the last three months than originally estimated. Revisions in July and August added 119,000 more jobs than reported last month. Jobs, especially in Leisure & Hospitality have been boosted by persistently strong consumer spending. Also, the month of September has repeatedly seen unexpected job growth in state employment education since the pandemic began, indicating new seasonal patterns that are not yet captured by the BLS’s seasonal adjustments.
Nevertheless, there are some signs that the labor market may not be as tight as it seems at first glance. Wage gains are softening somewhat while the number of part-time jobs has been growing, albeit unevenly, since mid-2022. This may be a sign that employers are nervous about an economic downturn but want to avoid employee shortages once the economy strengthens.