Jobs report beats expectations


Michael Smith, News Editor

The United States’ economy added 248,000 nonfarm jobs in September, smashing expectations and resulting in the US unemployment falling to 5.9%, the first time below 6% in six years. The Bureau of Labor Statistics released the report early on Friday, and in response, the Dow Jones Industrial Average (DJIA) jumped nearly 135 points in only three hours of trading.

The boom in job growth was fueled by strong showings in professional and business services, retail, health care, and construction. The average work week in hours for all employees also rose 0.1 points to 34.6 hours a week.

Yet, with a healthy increase in employment also came with a lackluster report on the status of the average employee. Wages have continued to stagnate, with the average hourly pay for all employees actually dropping one cent from $24.54 to $24.53. Also, the number of people working part-time but who would like to work full-time stayed the same at 7.1 million people compared to August.

The jobs report is released on a monthly basis on the first Friday after the conclusion of the prior month. The report is seen by most economists as a massive indicator of the health of the United States’ overall economy, especially in the recovery years after the Great Recession of 2008-2009.

The report determines the official unemployment rate by taking the number of people who are unemployed, available to take a job, and actively searching for work as a percentage of the workforce. At the height of the Great Recession, unemployment was 10.0%, but has steadily decreased to the current 5.9% by roughly 0.8% per year.

The September report not only flouted the sour taste in economist’s mouths after a rather dismal August report, but also included a revision for August from 132,000 job gain to 180,000.

John Canally, market strategist and economist at LPL Financial, noted that “[w]e’re still in the mode that the economy is creating 200,000 jobs a month. … That should help to calm the nerves that the economy is weakening. … It reinforces the economy is doing just fine.”

The next big announcement about the health of the economy will be determined by the Federal Reserve. If they see this jobs report as good enough evidence of a full recovery, they will continue cutting back on stimulus money they have been pumping into the economy. If they do, it will be another sign that the Recession is behind the United States.