September Jobs Report Expected to Show Modest Growth Amid Stable Labor Market
The upcoming September jobs report from the Bureau of Labor Statistics is likely to create some noise, but economists are focusing on the trend rather than month-to-month fluctuations. The consensus estimate expects a modest increase of 90K in nonfarm payroll numbers, down from August's reading of +162K. The unemployment rate is expected to remain steady at 4.1%.
Olu Sonola, head of U.S. Economics at Fitch Ratings economics research division, notes that forecasting the jobs report can be like 'a coin toss.' However, he emphasizes the importance of looking beyond the noise and focusing on the trend. The Chicago Fed's real-time model for labor market indicators suggests a slight uptick in hiring rates for unemployed workers in September.
The jobs report also provides insight into wage growth, with consensus expecting a 0.3% month-over-month increase in average hourly earnings, unchanged from August's increase. Sonola notes that the labor market has been 'relegated' to the background due to inflation pressures but remains an important indicator of economic health.
The Job Openings and Labor Turnover Survey (JOLTS) data reinforces the narrative of a low-hire, low-fire labor market, with job openings moving sideways. Sonola prefers to look at trends rather than month-to-month movements, particularly with the ADP National Employment report, which measures private sector employment.