September Unemployment Report which includes:

Forecast      Actual

Unemployment Rate                                                  6.1%      5.9%

Non-Farm Employment Change                           216k      248k

Average Hourly Change                                          0.2%      0.0%

The market cheered the unemployment report going up close to 1% on all major indexes.  On the face value, the report looks very good.  Unemployment rate fell under 6% for the first time in years and there was 248 thousand new jobs created last month which was 32 thousand more than expected.  The July and August reports were also revised upwards by 69,000 new jobs.  Overall, a “blockbuster” of an economic report.

However, one of the frustrating things we see in our economic reporting system is a lack of complete truth.  We leave out certain statistics as they are too volatile, not important, or simply want the report to seem better than the total truth.  So lets look at a few key elements that are not headline news but still vital to the over health of the labor force.

1) Hiring by Age demographic: Total 248 k

55-69: Increased 230 k

25-54: Reduction of 10 k

20-24: Reduction of 72 k

16-19: Increased 45 k

2) Labor Force Participation Rate: Refers to the percentage of the population active in the labor force.  The participation rate fell to 62.7 which is at a 36 year low.  This represents 97,000 workers who dropped out of the labor force and one of the reasons unemployment rate dropped.

3) Average work week up .1 to 34.6

4) Average Hourly Earnings decreased by 1 cent to $24.52

5) 80% of new jobs created in August and September have been in the low income service, hospitality, health, education, and temp fields.

My biggest concern is that while the headline is positive, when you break down the numbers the report is quite disturbing.  The vast majority of jobs created were in a demographic that should be preparing for retirement and in areas that are low paying incomes such as Walmart greeters but that does not make a good headline.

More jobs, yes but these jobs are part-time, seasonal, and low paying where the wages have been stagnant since 1989.

Enjoy the headline though.

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