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[Markets] Who's Hiring And Who's Firing In September... And What Was Behind The Dismal Jobs Print Who's Hiring And Who's Firing In September... And What Was Behind The Dismal Jobs Print

If one looks at the weeds of today's jobs report which showed just 194K jobs added, the lowest monthly increase in 2021 and missing all but one of the 72 economist forecasts, it was hardly the stinker the headline number suggested. For one, the unemployment rate slumped to 4.8% from 5.2% as the number of unemployed workers (counted by the Household Survey) plunged by 710K while the number of employed rose 526K, even as the civilian labor force declined by 183K. Another positive aspect is that hourly earnings rose 0.6% from the previous month, up from 0.4% in August. Then there were the prior revisions which added a total of 169K in the previous two months.

But despite these mitigating factors, the focus was on the headline print (which comes from the Establishment Survey) and which was, for lack of a better word, dismal, and not far from where the Fed would reconsider a November taper announcement (certainly pay attention to what FOMC members will say in the coming weeks, at least those who don't day trader).

Drilling down into the headline jobs print, we find several notable highlights:

First, the number of private payrolls, at +317K, was actually not that bad, and was virtually unchanged from last month's 332K (post revision and 243K pre). Expect upward revisions next month as the BLS "normalizes" its seasonal adjustment rate. Of note here, while leisure and hospitality hiring was depressed in August and September due to the delta wave, at least it was above zero. Recall that the original August jobs report showed 0 gains for the sector, a number which has since risen to 38,000. In September, another 74,000 jobs were added with continued job growth in arts, entertainment, and recreation (+43,000) and while still below the run rate of the previous several months, the number is not as bad as previously feared.

Second, and most important, the single biggest contributor to the lousy jobs report was the shocking drop in government workers, which tumbled by 133K. This was the biggest monthly decline since Oct 2020.

This number was entirely due to a loss of 144K government education jobs. Commenting on the plunge in local government teacher, the BLS said that "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."

What this likely means is that next month the BLS will revise its seasonal adjustment model to account for the easing in the pandemic, and reverse much if not all of this report's drop. And if it doesn't, it means that even more jobs will come on line in October and November. In any case, if one excludes the plunge in local education, the jobs report was hardly terrible.

With these caveats in mind, here is who was hiring and firing in September.

  • Professional and business services added 60,000 jobs in September. Employment continued to increase in architectural and engineering services (+15,000), management and technical consulting services (+15,000), and computer systems design and related services (+9,000). Employment in professional and business services is 385,000 below its level in February 2020.
  • Employment in retail trade rose by 56,000, following 2 months of little change. Over the month, employment gains occurred in clothing and clothing accessories stores (+27,000), general merchandise stores (+16,000), and building material and garden supply stores (+16,000). These gains were partially offset by a loss in food and beverage stores (-12,000). Retail trade employment is 202,000 lower than its level in February 2020.
  • Employment in transportation and warehousing increased by 47,000 in September, in line with gains in the prior 2 months. In September, job gains continued in warehousing and storage (+16,000), couriers and messengers (+13,000), and air transportation (+10,000). Employment in transportation and warehousing is 72,000 above its pre-pandemic level in February 2020.
  • Employment in the information industry increased by 32,000 in September. Gains occurred in motion picture and sound recording industries (+14,000); in publishing industries, except Internet (+11,000); and in data processing, hosting, and related services (+6,000). Employment in information is down by 108,000 since February 2020.
  • In September, social assistance added 30,000 jobs, led by a gain in child day care services (+18,000). Employment in social assistance is 204,000 lower than in February 2020.
  • Employment in manufacturing increased by 26,000 in September, with gains in fabricated metal products (+8,000), machinery (+6,000), and printing and related support activities (+4,000). These gains were partially offset by a decline of 6,000 in motor vehicles and parts. Manufacturing employment is down by 353,000 since February 2020.
  • Construction employment rose by 22,000 in September but has shown little net change thus far this year. Employment in construction is 201,000 below its February 2020 level.
  • In September, employment in wholesale trade increased by 17,000, almost entirely in the durable goods component (+16,000). Employment in wholesale trade is down by 159,000 since February 2020.
  • Mining employment continued to trend up in September (+5,000), reflecting growth in support activities for mining (+4,000). Mining employment has risen by 59,000 since a trough in August 2020 but is 93,000 below a peak in January 2019.
  • Employment in local government education decreased by 144,000 and by 17,000 in state government education. Employment changed little in private education (-19,000). Most back-to-school hiring typically occurs in September. 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. Since February 2020, employment is down by 310,000 in local government education, by 194,000 in state government education, and by 172,000 in private education.
  • Employment in health care changed little in September (-18,000). Job losses occurred in nursing and residential care facilities (-38,000) and hospitals (-8,000), while ambulatory health care services added jobs (+28,000). Employment in health care is down by 524,000 since February 2020, with nursing and residential care facilities accounting for about four-fifths of the loss. ¬†

And visually:

Finally, courtesy of Bloomberg, here are the industries with the highest and lowest rates of employment growth for the most recent month.

Tyler Durden Fri, 10/08/2021 - 10:15
Published:10/8/2021 9:19:51 AM
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