Employment grew at a slower but still solid pace. Here are the five things we learned from U.S. economic data released during the week ending October 7.
Payrolls expanded and the unemployment rate returned to a pandemic low in September. Nonfarm payrolls grew by a seasonally adjusted 263,000, following July and August gains of 537,000 and 315,000, respectively. The Bureau of Labor Statistics data also show that private sector employment grew by 288,000, split between the goods-producing and service sector by 44,000 and 244,000 jobs, respectively. Industries adding the most workers in September were leisure/hospitality, health care/social assistance, and professional/business services. Average weekly earnings have risen 4.1 percent over the past year to $1,119.87.
The separate household survey returns the unemployment rate to its pandemic-low of 3.5 percent after falling by 2/10thsof a percentage point. The labor force contracted by 57,000 as the participation rate slipped by 1/10th of a percentage point to 62.3 percent. The 25 to 54 participation rate lost 1/10th of a percentage point to 82.7 percent. The median length of unemployment fell to a pandemic-low of 8.3 weeks, while the number of part-time employees desiring full-time work shrank by 306,000 to 3.843 million. Also matching its pandemic-low is the U-6 series (the broadest measure of labor underutilization) at 6.7 percent.
There were fewer open jobs in August. The Bureau of Labor Statistics estimates that there were a seasonally adjusted and still inflated 10.053 million job openings. This was down 1.117 million openings from July and 5.4 percent from a year earlier, falling to its lowest reading since June 2021. Industries with at least one million open jobs included professional/business services, health care/social assistance, accommodation/food services, and government. Hiring increased by 39,000 to 6.277 million (-1.3 percent versus August 2021), with professional/business services, accommodation/food services, health care/social services, and retail leading the way. 5.976 million people left their jobs in September, up 181,000 from July and 1.1 percent from a year earlier. This included the 100,000 more people who quit their jobs (to 4.158 million, +0.8 percent versus August 2021) and the additional 130,000 laid off workers (to 1.450, +4.0 percent versus August 2021).
Purchasing managers signal slower manufacturing sector growth in September. The PMI, the headline index from the Institute for Supply Management’s Manufacturing Report on Business, lost 1.9 points to 50.9. While this was the PMI’s 28th consecutive month above a reading of 50.0 (indicating growth in the manufacturing sector), it had fallen to its lowest point since May 2020. Dropping sharply were measures for new orders and employment, while those for production and inventories improved. Only nine of 18 tracked manufacturing sectors reported growing in September, led by nonmetallic mineral products, machinery, and plastic/rubber products. Noting that survey respondents had not mentioned layoffs, the press release stated that “compared are confident of near-term demand.”
Meanwhile, the service sector report indicates resiliency. The Services PMI edged down 2/10ths of a point in September to 56.7. The Institute for Supply Management’s measure has also remained above 50.0 for 28 months. Among significant index components, only that for employment improved. Indices for business activity/production, new orders, and inventories declined. Fifteen of 18 service sector industries expanded in September, led by mining, education services, and agriculture. The press release noted improvements in “supply chain efficiency, operating capacity, and materials availability.”
Trade activity and deficit declined in August. The Census Bureau and the Bureau of Economic Analysis report that exports declined 0.3 percent to a seasonally adjusted $258.9 billion and imports slowed 1.1 percent to $326.3 billion. The result trade deficit of -$67.4 billion was down 4.3 percent from the prior month and the smallest reported since May 2021. The goods deficit narrowed by $3.4 billion to -$87.6 billion, while the services surplus declined by $0.4 billion to +$20.2 billion. The former reflects smaller exports of nonmonetary gold, crude oil, and passenger cars and declining imports of crude & fuel oil, semiconductors, and computer accessories. The U.S. had its largest goods deficits with China, the European Union, Mexico, Vietnam, and Canada.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending October 1, 2022, First-Time Claims, seasonally adjusted): 219,000, +29,000 vs. the previous week, -121,000 vs. the same week a year earlier). 4-week moving average: 206,500 (-43.4% vs. the same week a year earlier).
- Factory Orders (August 2022, New Orders for Manufactured Goods, seasonally adjusted): $548.4 billion (Unchanged vs. July 2022, +12.8% vs. August 2021).
- Vehicle Sales (September 2022, Light Trucks and Autos, seasonally adjusted annualized rate): 13.492 million (+2.9% vs. August 2022; +9.6% vs. September 2021).
- Wholesale Trade (August 2022, Merchant Wholesalers’ Inventories, seasonally adjusted): $912.6 billion (+1.3% vs. July 2022; +25.0% vs. August 2021).
- Construction Spending (August 2022, Value of Construction Put in Place, seasonally adjusted annualized rate): $1.781 trillion (-0.7% vs. July 2022; +8.5% vs. August 2021).
- Consumer Credit (August 2022, Outstanding Non-Real Estate Backed Consumer Credit Balances, seasonally adjusted): $4.680 trillion (+$32.2 billion vs. July 2022; +8.1% vs. August 2021).
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What We Learned About the U.S. Economy Last Week 