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« on: October 07, 2011, 09:52:22 AM »
Non-farm payrolls were up 103,000 in September To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 10/7/2011
Non-farm payrolls were up 103,000 in September and up 202,000 including revisions to
July/August. The consensus expected a gain of 60,000.
Private sector payrolls increased 137,000 in September. Revisions to July/August
added 42,000, bringing the net gain to 179,000. September gains were led by
professional & business services (+48,000), health care (+44,000), telecomm
(+38,000, due to the end of the Verizon strike), and non-residential construction
(+30,000). The biggest decline was manufacturing (-13,000).
The unemployment rate remained unchanged at 9.1%.
Average weekly earnings – cash earnings, excluding benefits – increased
0.5% in September and are up 2.1% versus a year ago.
Implications: The employment report for September shows, without a shadow of a
doubt, that the US economy is not in recession. Including upward revisions for July
and August, nonfarm payrolls increased 202,000. That easily beat consensus
expectations of a 60,000 gain and is a solid gain even if we exclude the 45,000
workers who ended a strike with Verizon. In addition, the number of weekly hours per
worker increased to 34.3 from 34.2 in August, which is the equivalent of 320,000
jobs. But the good news does not stop there. Civilian employment, an alternative
measure of jobs that factors in small business start-ups, increased 398,000. This
was enough to keep the unemployment rate at 9.1% despite a 423,000 gain in the size
of the labor force, the largest increase in more than a year. Very quietly, without
any fanfare, private sector payrolls have grown by 1.8 million in the past year,
while the workweek has lengthened and hourly cash wages are up 1.9%. A 9.1%
unemployment rate means the labor market is still far from operating at its full
potential, but it is moving in the right direction as are other data. September
chain store sales were up 5.5% versus a year ago, according to the International
Council of Shopping Centers. This includes luxury department store sales up 10.4%.
Meanwhile, core railcar loadings are up 5.7% versus a year ago, according to data
from the Association of American Railroads. Initial claims for unemployment
insurance increased 6,000 last week to 401,000. But continuing claims for regular
state benefits declined 52,000 to 3.70 million. Investors have been grossly misled
about the odds of a recession.