September 2017 Employment Situation
Submitted by Atlas Indicators Investment Advisors on October 8th, 2017
Headline figures were mixed on Friday when the Bureau of Labor Statistics (BLS) released their employment report. According to the establishment survey, our economy lost 33,000 jobs to end the third quarter of 2017. However, the household survey estimates the unemployment rate declined to the lowest level since January 2001, 4.2 percent from 4.3 percent in August. The BLS believes weather-related challenges hurt the establishment tally but had little to no impact on the household estimate.
A couple of sectors seem to have been influenced by weather. Food services and drinking places dropped 105,000 employees in the period; many of these layoffs were due to the recent hurricanes. Financial services firms were little changed in September, but a subset of the category, insurance carriers, added 11,000 jobs, largely reflecting hurricane-recovery efforts.
Average workweek figures were unchanged, but wages improved. For all employees, the average workweek remained steady at 34.4 hours. Manufacturing employees worked roughly 40.7 hours and were paid extra for an average of 3.3 hours of overtime, both unchanged. Production and nonsupervisory employees’ workweek held steady at 33.6 hours. Average hourly earnings for all employees rose 12 cents to $26.55 or 0.45 percent. Compared to a year earlier, this measure of pay increased 74 cents or 2.9 percent.
Gulf Coast storms hit during a couple of crucial points in time for September. First, Harvey hit after August data were collected, so September figures suffered from an event of the prior period. Second, Hurricane Irma made landfall in Florida on September 10th which was during the week of both surveys. Now Nathan has passed and will likely have an impact on October’s data. Expecting lots of noise in the months ahead for employment data, Atlas will pay closer attention to trends using monthly averages to decipher the health of our nation's labor market better.
