It does not make up for all the previous weakness
This article first appeared on SchiffGold.
The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the Headline Report, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.
The BLS reported a gain of 254k jobs which blew past expectations. Despite the large beat, the number still came in south of the Household Survey which reported a whopping 430k jobs.
Figure 1: Primary Report vs Household Survey - Monthly
Despite the massive beat in the Household Survey, when looked year to date, the Household Survey is still well below the Headline number by the largest margin in over 14 years. The Headline Report is 1.8M vs the Household Aurvey showing 681k, representing 37.8%.
Figure 2: Primary Report vs Household Survey - Annual
The BLS also publishes the data behind their Birth/Death assumptions (formation of new business). In September, the BLS assumed 128k jobs lost in their birth/death assumptions. This means that despite the big beat, the BLS was actually making assumptions of job losses due to new/closing businesses.
Figure 3: Primary Unadjusted Report With Birth Death Assumptions - Monthly
When zooming out to look at the last several years, the picture changes. In this case, the BLS has essentially assumed the creation of ALL jobs YTD.
Figure 4: Primary Unadjusted Report With Birth Death Assumptions - Monthly
The 254k jobs was accompanied by an unemployment rate falling to 4.1%.
Figure 5: Change by sector
When looking over the last 12-month trend, Leisure/Hospitality was the big beat this month - almost tripling the recent average.
Figure 6: Current vs TTM
The table below shows a detailed breakdown of the numbers.
Monthly Average Change | Total % Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|
Category | Total Employed | Current Month | 3 Months | 12 Months | 3 years | Current Month | 3 Months | 12 Months | 3 years |
Private Sector | |||||||||
Construction | 8,303 | 25 | 23.3 | 19.8 | 23.0 | 0.3% | 0.8% | 2.9% | 10.0% |
Education Health | 26,544 | 81 | 69.3 | 82.0 | 79.1 | 0.3% | 0.8% | 3.7% | 10.7% |
Financial | 9,259 | 5 | 3.7 | 3.0 | 11.4 | 0.1% | 0.1% | 0.4% | 4.4% |
Information | 2,996 | 4 | -6.3 | -1.0 | 2.1 | 0.1% | -0.6% | -0.4% | 2.5% |
Leisure Hospitality | 17,075 | 78 | 56.3 | 30.6 | 64.9 | 0.5% | 1.0% | 2.1% | 13.7% |
Manufacturing | 12,917 | -7 | -9.3 | -3.1 | 13.3 | -0.1% | -0.2% | -0.3% | 3.7% |
Mining and Logging | 639 | 3 | 1.7 | -0.5 | 2.0 | 0.5% | 0.8% | -0.9% | 11.4% |
Other Services | 5,918 | 4 | 1.0 | 5.2 | 10.6 | 0.1% | 0.1% | 1.1% | 6.5% |
Prof Business | 22,989 | 17 | 3.0 | 10.4 | 39.4 | 0.1% | 0.0% | 0.5% | 6.2% |
Trade Trans Utils | 29,044 | 13 | 2.7 | 13.5 | 33.3 | 0.0% | 0.0% | 0.6% | 4.1% |
Government | |||||||||
Government Federal | 2,999 | 2 | 1.0 | 4.5 | 3.1 | 0.1% | 0.1% | 1.8% | 3.7% |
Government Local | 14,939 | 16 | 23.7 | 27.2 | 24.8 | 0.1% | 0.5% | 2.2% | 6.0% |
Government State | 5,483 | 13 | 15.7 | 11.4 | 9.5 | 0.2% | 0.9% | 2.5% | 6.2% |
Total | |||||||||
All | 159,105 | 254 | 185.7 | 203.2 | 316.6 | 0.2% | 0.4% | 1.5% | 7.2% |
Values in 1,000s of workers. Data as of: Sep 2024. Total Employed = Entire size of the labor market. | |||||||||
The chart below shows how the jobs data has been revised in recent months. There have been significant downward revisions since January of this year. July and August are both showing modest revisions upward, but it does not make up for the massive downward revision in June.
Figure 7: Revisions
The three-month revision trend is still negative by 29.7k jobs per month.
3 Month Compare | 12 Month Compare | 3 Year Compare | |||||||
|---|---|---|---|---|---|---|---|---|---|
Category | Current | As Of Published | Avg Month Diff | Current | As Of Published | Avg Month Diff | Current | As Of Published | Avg Month Diff |
Private Sector | |||||||||
Construction | 63 | 84 | -7.0 | 226 | 256 | -2.5 | 849 | 749 | 2.8 |
Education Health | 209 | 185 | 8.0 | 984 | 995 | -0.9 | 2,760 | 2,778 | -0.5 |
Financial | 19 | 12 | 2.3 | 31 | 53 | -1.8 | 433 | 316 | 3.2 |
Information | -23 | -23 | 0.0 | -5 | 7 | -1.0 | 94 | 89 | 0.1 |
Leisure Hospitality | 95 | 147 | -17.3 | 316 | 418 | -8.5 | 2,391 | 2,287 | 2.9 |
Manufacturing | -37 | -30 | -2.3 | -17 | -4 | -1.1 | 523 | 491 | 0.9 |
Mining and Logging | 2 | 2 | 0.0 | -8 | -9 | 0.1 | 71 | 65 | 0.2 |
Other Services | 7 | 0 | 2.3 | 68 | 69 | -0.1 | 391 | 400 | -0.2 |
Prof Business | -19 | 24 | -14.3 | 107 | 145 | -3.2 | 1,496 | 1,419 | 2.1 |
Trade Trans Utils | -6 | 37 | -14.3 | 191 | 225 | -2.8 | 1,318 | 1,169 | 4.1 |
Government | |||||||||
Government Federal | 3 | 4 | -0.3 | 58 | 54 | 0.3 | 109 | 105 | 0.1 |
Government Local | 67 | 47 | 6.7 | 338 | 329 | 0.8 | 870 | 713 | 4.4 |
Government State | 41 | 21 | 6.7 | 141 | 121 | 1.7 | 320 | 212 | 3.0 |
Total | |||||||||
All | 421 | 510 | -29.7 | 2,430 | 2,659 | -19.1 | 11,625 | 10,793 | 23.1 |
Values in 1,000s of workers. Because this data is focused on revisions, it is as of the month prior: Aug 2024. "Current" shows the change in employment after revisions. "As Of Published" shows change in employment at time of release. "Avg Month Diff" shows the average monthly change from the revisions. | |||||||||
Another level of detail in the Household report shows full-time vs part-time job holders. In August, all of the jobs that were added were full-time jobs, with the economy even losing some part-time jobs.
Figure 8: Full Time vs Part Time
The chart below shows data going back to 1955.
Figure 9: Historical Labor Market
The labor force participation rate is still well below the highs before the Global Financial Crisis. This month it stayed steady at 62.7%.
Figure 10: Labor Market Distribution
While the past several job reports were very weak, and even weaker in the details, this job report was strong across nearly every level. The question is… will the numbers hold. There is an election coming up in a month. This is possibly the most important jobs report that could influence the election outcome. Is it surprising that this is one of the strongest jobs report in a year? Probably not… expect downward revisions and adjustments in the months ahead.