September US payroll figures underwhelm

Nonfarm payroll rise of 194,000 misses 500,000 estimate

The US economy added jobs at a far lower level than expected in September, further undermining confidence in the strength of the post-Covid recovery. 

Instead of the 500,000 Dow Jones estimates, nonfarm payrolls rose by 194,000 in the month, according to the Bureau of Labor Statistics. 

This constituted an almost 50% drop from the 366,000 revised figure in August, the first consecutive monthly drop in payrolls of 2021 and the lowest print of the year thus far. 

A 123,00 drop in government payrolls was a major factor in the headline figure, with 144,000 positions falling in local government education. 

The BLS stated: "Hiring this September was lower than usual, resulting in a decline after seasonal adjustment. Recent employment changes are challenging to interpret, as pandemic- related staffing fluctuations in public and private education have distorted the normal seasonal hiring and layoff patterns.”

The private payrolls rose by 317,000. The leisure and hospitality sector continued to lead, adding 74,000 jobs in the month. Retail positions increased by 56,000, while professional and business services added 60,000. 

Although payrolls may have disappointed, the unemployment rate fell from 5.2% to 4.8%. Analysts had predicted a 0.1% decline to 5.1%. 

At the same time that the employment-population ratio increased by 0.2% to 58.7%, the civilian labour force fell by 183,000 to 161.3m and the labour participation rate fell by 0.1% to 61.7%. 

By noon (EST), the Dow Jones Industrial Average and S&P 500 traded flat, while the Nasdaq Composite stood at 0.3% lower.

Further reading: US DoE says it won’t sell strategic oil reserves

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