The Jobs Report – September 2022

Highlight

The economy added 263K jobs in September, a slight deceleration from last month’s gain of 315K but better than expectations of a 255K gain. The prior two months were revised up by 11K. On whole, we feel this is another solid employment report as the labor market remains healthy.

What you need to know:

• The unemployment rate decreased to 3.5% from 3.7% as the household survey showed a gain of 204K jobs, and a slight decrease in the size of the labor force, reversing last month’s large gain in the labor force. The decline in the labor force is a slight negative.
• Wage growth was solid at 5% year over year. However this is still well below the inflation rate of 8.3%, so workers continue to lose purchasing power despite the strong labor market. This is one of the reasons the Fed is determined to bring down inflation to protect workers’ wage gains.
• Private payrolls gained 288K jobs, with gains in most sectors. Education and Health Services, along with Leisure and Hospitality, had the largest increases in jobs while Government, Retail Trade, and Transportation lost jobs.
• The labor market remains strong despite the Fed raising rates aggressively this year. The market expects another 75bps increase in rates in November and this report should not give the Fed reasons to temper that rate increase.