US September 2020 jobs report
- Prior was +1371 (revised to +1489K)
- Unemployment rate 7.9% vs 8.2% expected
- Prior unemployment rate 8.4%
- Rate without misclassification issues 8.3% vs 9.1% prior
- Participation rate 61.4% vs 61.9% expected
- Prior participation rate 61.7%
- Underemployment rate 12.8% vs 14.2% prior
- Average hourly earnings +0.1% m/m vs +0.4% expected
- Average hourly earnings +4.7% y/y vs +4.8% expected
- Average weekly hours 34.7 vs 34.6 expected
- Two month net revision +145K
- Change in private payrolls +877K vs +875K expected
- Change in manufacturing payrolls +66K vs +35K expected
- 2.41m unemployed for 27 weeks or more (long term threshold)
The fall in unemployment below 8% is a headline-grabber but the 0.5 pp fall in unemployment comes with a 0.3 pp fall in participation so it's partially a mirage. Falling participation isn't good for the economy and suggests some people are drifting towards long-term unemployment, or getting disconnected from the labor force. Overall participation is 2.0 points below pre-COVID.
Overall though, this is a solid report and certainly better than expected. The market reaction has been minimal.
