September 2016 Jobs Report

 Unemployment Rate: 5.0 percent

Unemployed Americans: 7.9 million

Employment and Unemployment

1. The Department of Labor reported an unemployment rate of 5.0 percent for September, up 0.1 percent from last month.

1. The jobs report shows an increase of 156,000 nonfarm jobs in September, lower than analysts’ prediction of job growth around 170,000. Employment for July was revised down from 275,000 to 252,000 jobs created; and August was revised up from 151,000 to 167,000.  

1. In 2016, employment growth has averaged 178,000 per month, down from 229,000 per month in 2015.

1. Unemployment in September among those ages 16-19 was 15.8 percent, up 0.1 percentage point from last month. For people of Hispanic or Latino ethnicity, the unemployment rate was 6.4 percent, up 0.8 percentage point from August. For African-Americans, the unemployment rate was 8.3 percent, up 0.2 percentage point from the prior month.

1. The number of long-term unemployed, those unemployed for 27 weeks or more, was 2 million, unchanged from last month. They account for 24.9 percent of the unemployed, down from 26.1 percent in the prior month.

1. The “real” unemployment or U-6 rate is 9.7 percent, unchanged from last month. This is the total percentage of unemployed and underemployed workers.

1. The “real” number of unemployed Americans is 15.6 million. These are people who are unemployed (7.9 million), want work but have stopped searching for a job (1.8 million), or are working part time because they cannot find full-time employment (5.9 million).  

1. In September, employment grew by 67,000 in professional and technical services; 33,000 in health care; 30,000 in food services and drinking establishment; 23,000 in construction; and 22,000 in retail trade. Employment in mining was unchanged last month. Since reaching a peak in September 2014, employment in mining has fallen by 220,000. Employment also fell in manufacturing by 13,000 and by 15,000 in local government in September. 

1. In December 2015, the Federal Reserve raised its main interest by rate 0.25 percent, its first rate increase in nearly 10 years. Since then, mixed economic reports and global concerns have been noted as reasons to refrain from further adjustments. Following its September meeting, the Federal Reserve stated “the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

1. The Federal Reserve next meets on November 1.  

Labor Force Participation

1. The labor force participation rate is 62.9 percent, up 0.1 percentage point from last month and remaining near the lowest level in 38 years. The persistently low labor force participation rate shows that millions of Americans are staying on the sidelines. Since October 2013, the participation rate has largely been stuck in a narrow range of 62.5 to 63 percent. Prior to the recession, the rate was 66 percent. 

1. If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.0 percent.

1. The share of American adults with jobs in September was 59.8 percent, up 0.1 percentage point from last month. This is nearly 4 percentage points below its pre-recession peak. 

Wages

1. In September, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $25.79. Over the year, average hourly earnings have risen by 2.6 percent.

1. September was the 86^th straight month that year-over-year hourly wage growth has been at or below 2.6 percent. Prior to the recession, wage growth routinely exceeded 3 percent.