The U.S. labor market experienced widespread growth in September, defying expectations of a slowdown. This strong jobs report immediately impacted the bond market, leading to a sell-off.
One notable sector that showed significant growth was leisure and hospitality, a finding from the Bureau of Labor Statistics. With a net gain of 96,000 jobs last month, this surpassed the combined total for August and July.
Of all the areas within leisure and hospitality, bars and restaurants demonstrated the strongest growth, adding 61,000 jobs.
Furthermore, there was an increase in government hiring, resulting in a net gain of 73,000 jobs in September. This is a considerable improvement compared to the 6,000 jobs added in the same month last year.
Notably, state government education contributed 29,000 of these jobs this year.
Jason Furman, a Harvard professor and former National Economic Council director, suggests that the job market’s resilience may be due to more workers entering the labor market, whether through immigration or returning from the sidelines.
“Over the last three months, we’ve been creating jobs at a rate of nearly 300,000 per month,” Furman stated during an interview on CNBC’s “Squawk Box.” “This exceeds what is necessary for the normal replacement rate, but we’ve also seen a higher participation rate. So perhaps what we’re witnessing is a labor supply phenomenon rather than labor demand.”
Furman also pointed out that the average hourly earnings have been rising at an annual rate of 3.4% over the past three months, which would correspond to inflation in the mid-to-low 2s if sustained.
It is important to consider the impact of labor disputes on the monthly jobs report. For example, the health-care subsector added 41,000 jobs, which is lower than its 12-month average. However, this data does not account for the Kaiser Permanente strikes, as the BLS survey was conducted in mid-September.
On the other hand, job losses in the information sector were primarily driven by a decrease in employment within motion picture and sound recording industries. The BLS attributed this to ongoing labor disputes, as the Screen Actors Guild strike has halted many productions.
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