The U.S. labor market demonstrated mixed signals in September 2023, with job growth increasing while the unemployment rate also ticked higher. According to the U.S. Bureau of Labor Statistics, non-farm payrolls rose by 119,000 after a decline in the previous month. However, the unemployment rate increased to 4.4 percent, marking the highest level in nearly four years. This rise reflects an expansion in the labor force, indicating a complex landscape for job seekers.
The September jobs report, originally scheduled for release on October 3, was significantly delayed due to the government shutdown that began on October 1. Despite the shutdown, the BLS had completed data collection before the closure, allowing this report to be one of the first published post-reopening. The job gains for September were primarily concentrated in the health care and leisure and hospitality sectors. Conversely, industries like manufacturing, transportation and warehousing, and business services reported declines.
As the labor market enters the final quarter of the year, the data presents a snapshot of an uneven U.S. economy. The previous report had indicated sluggish hiring trends in a low-hire, low-fire environment. Recent announcements of layoffs have further fueled concerns about job security among American workers. The private payrolls increase in September marked the most significant rise in five months, suggesting potential resilience in the job market.
This report is critical as it will be the last the Federal Reserve reviews before its upcoming meeting on December 9-10. Federal Reserve Chair Jerome Powell noted last month that any further interest rate cuts are uncertain. Minutes from the October meeting revealed that many policymakers were hesitant about another reduction, highlighting the division among officials regarding the need for monetary easing in response to labor market trends.
Following the report, Treasury yields declined while S&P 500 futures experienced a positive shift during early trading. In a separate release, applications for U.S. unemployment benefits fell to a three-week low for the week ending November 15, according to the Labor Department.
Looking ahead, the BLS announced that the jobs report originally scheduled for November 7 will not be published. Instead, those payroll figures will be incorporated into the November report, due on December 16, after the Federal Reserve’s meeting. Unfortunately, key statistics, including the unemployment rate, will not be included since the household survey necessary for gathering these figures could not be conducted during the government shutdown. The BLS stated that it cannot collect the data retroactively, further complicating the economic picture as the year draws to a close.
