Employers added just 29,000 jobs in September as pay gains trail inflation
The unemployment rate rose to 4.2%, July was revised to a job loss, and average pay is rising slower than prices.
The unemployment rate rose to 4.2%, July was revised to a job loss, and average pay is rising slower than prices.
The U.S. economy added just 29,000 jobs in September, and the unemployment rate rose to 4.2%, according to the Bureau of Labor Statistics report released Friday.
The report also showed the summer was weaker than first reported. July, originally counted as a gain of 21,000 jobs, was revised to a loss of 10,000. August was cut from 162,000 to 133,000, according to the BLS.
## The headline numbers
The unemployment rate ticked up from 4.1% in August, according to Forbes. About 7.1 million people were unemployed in September, the BLS said, and 1.9 million of them had been out of work for 27 weeks or longer.
Forbes reported that September's gain was well below the recent monthly average of about 45,000 jobs. Together, the revisions to July and August erased 60,000 jobs from earlier estimates.
## Where the jobs were
Health care added 17,000 jobs, construction added 11,000 and manufacturing added 9,000, according to the BLS. Financial activities lost 7,000 jobs. The bureau said most other major industries showed little change.
Forbes noted that health care's 17,000 new jobs were about half its recent monthly average of 33,000.
## Young workers
The unemployment rate for teenagers was 14.5% in September, according to the BLS. That is more than three times the overall rate.
## Pay vs. prices: the math
Average hourly earnings for private-sector workers rose 5 cents in September to $37.81, according to the BLS. That is 3.0% higher than a year earlier.
Prices are rising faster. The Consumer Price Index rose 3.4% in the 12 months through August, the most recent month available, according to the BLS. Gasoline was up 27.4% over the year.
Here is what that gap looks like, using only those two BLS figures:
- A year ago, average pay was about $36.71 an hour ($37.81 divided by 1.03).
- To keep up with 3.4% inflation, it would need to be about $37.96 now.
- Actual average pay is $37.81, about 15 cents an hour short.
- For someone working 40 hours a week, that is roughly $6 a week, or about $305 over a full-time year.
One caveat: the pay figure covers September, while the inflation figure covers August. The September inflation report is scheduled for Oct. 14, and the gap could grow or shrink. The figures are also averages; many younger and entry-level workers earn less than $37.81 an hour.
## What it means for you
The rise in the unemployment rate and the downward revisions both point to slower hiring.
If you are job hunting, health care, construction and manufacturing were the sectors still adding workers last month, according to the BLS. If you already have a job, the math above suggests average raises are not fully keeping pace with prices right now.
## What happens next
The next inflation report comes out Oct. 14 at 8:30 a.m. ET, according to the BLS. The October jobs report is expected in early November. Economists and the Federal Reserve will watch both to judge whether the labor market is cooling gradually or stalling.