Article written by Tyler Durden
Earlier this morning, the U.S. Bureau of Labor Statistics (BLS) reported that in September a total of 661K jobs were added, below the 868K expected, and less than half the 1.489MM in August, led by a sharp 216,000 drop in government jobs.
In September, the number of persons employed part time for economic reasons, referred to as involuntary part-time workers, declined by 1.3 million to 6.3 million, reflecting a decrease in the number of persons whose hours were cut due to slack work or business conditions. This may be in part as openings across the 50 states progress, and more people are able to return to full-time work. Further data released by the BLS reinforces this hypothesis, as in September, 22.7 percent of employed persons teleworked because of the coronavirus pandemic, down from 24.3 percent in August
‘Involuntary part-time workers’, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.
Additionally, September unemployment declined by 0.5 percentage points to 7.9 percent, and the number of unemployed persons fell by 1.0 million to 12.6 million.
The number of unemployed workers also declined, from 13.550MM to 12.580MM.
Despite all the seemingly positive news, there was also some bad.
One of the biggest reasons for the drop in the jobless rate was due to people no longer looking for work. This could be because they are discouraged (potential structural unemployment), have moved, went back to school, etc. So, despite strong initial numbers, part of the unemployment falling was due to this reason.
There were also the usual ‘book-cooking’: the BLS said that for the March-August period, they published an estimate of what the unemployment rate would have been had misclassified workers been included. By repeating this same approach, the overall September unemployment rate would have been 0.4 percentage points higher than reported.
The worst segment of the data release was in reference to permanent job losses, which rose by 340K to 3.756 million, the highest level since 2013. This is due to the ongoing business closures bankruptcies, and investment cuts across the US.
The next administration, whether Republican or Democrat, will be tasked with fixing an economy and labor market in very rough shape.
Works Cited:
https://www.zerohedge.com/markets/us-unemployment-rate-unexpectedly-plunges-below-8-661k-jobs-added