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The Dismal Employment Report

Date Posted: January 18, 2017

The Job Report
Economists projected that September would show a gain of about 200,000 payroll jobs. Instead, the Bureau of Labor Statistics (B.L.S.) released an employment report showing a (pick your word) dismal, grim, or terrible – all used in various headlines – gain of only 142,000 jobs . And of that total gain, the private economy generated only 118,000 new positions. Even more downbeat to us, the B.L.S. revised downward both July and August gains by 59,000 jobs. This brings second quarter average payroll gains to 167,000. That compares to a monthly average of 198,000 for all of 2015. In 2014, monthly gains averaged 260,000. Revisions, up or down, will typically reflect the trend of that data. So these downward revisions add further disappointment to the results. And for a reference, the
economy needs to create about 150,000 jobs to support new entrants into the job force.
The unemployment number remained unchanged at 5.1% but only as a result of the civilian labor participation rate declining to 62.4%. That level represents the lowest rate since 1977 during a period of recovery from an economic recession. Roughly 350,000 workers dropped out of the labor force. Again for reference, if the participation rate remained at levels before the great recession, roughly 5 million more payroll jobs would now exist.
And finally, the report showed a small monthly decline in the average workweek and flat hourly earnings. Compared to last year, hourly earnings increased 2.2%.