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September jobs report gives FOMC “green light” to hike rates, says NAFCU Chief Economist
The Bureau of Labor Statistics issued the September Jobs Report on Friday, which revealed that the unemployment rate fell from 3.7 percent in 3.5 percent. NAFCU Chief Economist and Vice President of Research Curt Long analyzed the report in a new NAFCU Macro Data Flash report.
“The September employment report was more of the same as jobs expanded at a strong clip, the unemployment rate declined, and wages grew at a modest rate,” said Long. “There were no signs of easing labor force strains as the participation rate ticked down while average hours worked increased.”
Total jobs increased by 263,000 in the month. Results in the private sector industry were mixed. Education and Health added 90,000 jobs, followed by Leisure and Hospitality (+83,000) and Professional and Business Services (+46,000). Meanwhile, the Finance sector saw 8,000 jobs lost. Jobs in the public sector fell by 25,000.
Labor force participation decreased by 0.1 percentage point to 62.3 percent. Average hourly earnings grew by ten cents in September, with year-over-year wage growth at five percent.
“The decline in the participation rate is disappointing but not surprising after a sizable increase in August,” Long remarked. “Last month's spike was concentrated among women, but female participation declined in September. Wage growth does appear to be slowing, consistent with the Fed's wishes, though that ‘progress’ has been slow to develop.”
“Overall, this report is a clear green light to the FOMC to proceed with another 75 basis point hike next month,” concluded Long.
For more up-to-date economic updates from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.