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On the surface, the Bureau of Labor Statistics September jobs report was good news today, as the jobless rate fell from 8.5 percent to 7.8 percent. But most people are saying that the actual job creation number, 114,000, isn’t that strong. Cliff Waldman, economist with the Manufacturers Alliance for Productivity and Innovation (MAPI), wrote at mapi.net: “The net gain in total non-farm job growth of 114,000 that we saw in September is inadequate. It is below what is needed to absorb new entrants to the labor force and less than half of the gain that we need on a consistent basis to really suggest a better day for the labor market.”
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The Conference Board’s Kathy Bostjancic commented today that while the economy continues to grow slowly, it is not slowing overall. “Right now, slow job and income growth is about all the economy is capable of generating as businesses remain focused on cutting costs. … Lack of demand plus concern about declining profits makes it difficult to generate new jobs at a faster pace,” she said.
Let’s break the numbers down by industry:
Manufacturing employment edged down 16,000, but on net, manufacturing employment has not changed since April. Decreases in manufacturing were mostly in computer and electronic products, and in printing and related activities. Waldman wrote: “The manufacturing sector, whose employment increases had been a modest bright spot, experienced its second monthly decline in jobs, clearly impacted by a difficult global slowdown. Anyone who thinks that the problems in Europe and the developing world are alien to our interests should reconsider.”
Construction employment went up by 5,000. The industry’s overall unemployment rate remains higher than most industries at 11.9 percent. The Associated General Contractors of America noted in a press release today that construction employment has been relatively flat for more than a year as growing demand for residential and some commercial projects has been offset by declining public sector activity. "It appears that for every rebounding market segment, there is another one that is shrinking,” said Stephen E. Sandherr, the association’s CEO. Residential and nonresidential construction added jobs in September, with residential outpacing nonresidential for the year.
Wholesale trade employment went down by 1,600 jobs. Overall the industry employment figures have been relatively flat through 2012.
Other interesting points made across the Web today in response to the report:
- Guy Blissett of IBM pointed out correctly on his Twitter feed @thundar65, adjustments to prior month’s payroll figures are interesting, as well. For August, total non-farm employment increased by 142,000 versus the 96,000 initially reported, and in July the actual number was 181,000 vs. the 141,000 initially reported.
- Waldman wrote in a post called Challenges Ahead that much of the change in jobless rate was due to the drop in the unemployment rate of workers with less than a high school diploma. Other educational groups saw little or no change. He asks: “Is much of the September fall in the unemployment rate due to those without a high school education taking part-time jobs?”
For those of you who are hiring, check out this month's Executive Briefing on Millennials in the Workplace. Watch part 3 below on how to bridge the divide between the young and the old: