September employment

Positive, some what strange, numbers from BLS this morning on the employment situation. In September, 114,000 net new jobs were created according to payroll data (in line with economists’ forecasts of 118,000 jobs). The unemployment rate fell to a much larger degree, dropping to 7.8% — due to a large increase in the number of employed individuals (up by 873,000) as measured by the household survey. This isn’t the first time that data from the payroll survey and the household survey have been different. But at least at this time, both are moving in the same direction. That is good news – and means that the labor market is getting better. That was reinforced by the upward revisions of the payroll numbers from previous months and by the drop in the household survey of the number of unemployed workers and the increase in the size of the labor force (i.e. people not dropping out).
The bad news is the situation with the involuntary underemployed. The total number of involuntary underemployment increased by 581,000 — more than double last months decline. Both the number of individuals working part time because of slack work and those who could only find part time work rose in September. The rise of 315,000 individuals working part time because of slack work is especially worrisome as an indicator of economic health.
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