On-air reporters and commentators were visibly energized. On-line reports and blog were upbeat. Social media was abuzz.
The reason for all this was an unexpectedly strong September Jobs Report, released by the Bureau of Labor Statistics at 8:30 this morning. Although the job market is still moving forward and upward on its own momentum over the past record setting 33 months – leaving many of us confident we’d see another good month – nobody saw this coming: 336,000 jobs created in September, nearly doubling most predictions.
Job growth far better than expected
Most predictions came in at 170,000, roughly half the real total. With the previous three months having slowed down considerably in job creation, many of us felt we’d reached cruising altitude, an acceptable condition. No sooner did we settle into that mind set than September came in with 336,000 and August was adjusted upward by 40,000.
Well distributed job growth
Leisure and hospitality gained 96,000 jobs; government added 73,000; health care rose by 41,000; professional, scientific, and technical services grew by 29,000; social assistance increased by 25,000; and transportation and housing changed little, but jumped by 9,000 nonetheless. Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; financial activities; and other services. These sectors have been doing well, and their no-change status is better than many prognosticators predicted.
How the job market really works
So today’s numbers are indeed cause for fist bumps and other celebratory rituals, but there are more numbers we should be watching: the below-the-surface goings on that, like your blood report, tell much more about your health than your weight and blood pressure.
Who found jobs?
For instance, when the civilian labor population (number of people in the workforce, employed or looking) grows by 90,000 and the number of employed grows by 86,000, it’s a sign of great harmony. In fact, it’s textbook theory: couldn’t be much closer. In effect, nearly all of the 90,000 who entered or re-entered the job market found the work they were looking for.
Along with that nearly perfect correlation, the total increase in unemployed was 5,000 more than in August. The increase in the civilian labor force, then, grew by 19 times the rate of the ranks of the unemployed. That’s where your doctor would say your great triglycerides numbers outweigh your slightly high LDL. It’s a holistic job.
Sharp jump in open jobs
In the BLS’ Job Openings and Labor Turnover Survey (JOLTS) – a related report that lags by a month – there’s more continued good news. The number of open jobs – jobs employers would fill immediately if the right candidate appears – jumped sharply in August from 8.9 million to 9.6 million. For perspective, that’s 5.8% of the size of the entire workforce, and higher than ever since it began being measured in 2000 – with the exception of the grotesque numbers of the pandemic and recovery.
Employers are focusing on employee retention.
Also on JOLTS, the hires rate, down from its high during the frenzy of strong recovery, is holding firm at 3.7%, echoing its performance during the recovery from the Great Recession. Further, the voluntary quits rate has fallen to 2.3%, and on the surface, that may seem like a lack of confidence that job seekers displayed during the “great resignation,” it strongly suggests, along with the hiring rate and continuing low layoffs rate, that employees are less transient and employers are focusing on employee retention.
Concurrently, wages continue to rise by a steady 4.2%, not only continuing a prolonged streak, but continuing to outpace inflation at 3.2%.
A very healthy job market
All in all, the job market continues its historic march. And it’s not out of blockbusters yet, either.
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