Why the unemployment rate rose even though the economy added 119,000 jobs in September
A delayed jobs report showed U.S. employers added 119,000 jobs in September, surpassing expectations, but downward revisions for the prior two months and an upward tick in unemployment tempered economists’ outlooks.
The Bureau of Labor Statistics report, delayed more than a month due to the federal government shutdown, showed job growth was concentrated in private education and health services, leisure and hospitality, and state and local government.
The unemployment rate inched up from 4.3% in August to 4.4% in September, the highest in nearly four years. Job gains for July were revised down 7,000, from 79,000 to 72,000. The initially reported 22,000 increase for August was revised to a loss of 4,000 jobs.
The 119,000 increase “takes some of the sting out of” August’s downward revision, according to Nancy Vanden Houten, lead economist at Oxford Economics.
Why did unemployment rise
if jobs were added?
The unemployment rate comes from a separate household survey that “tends to be more volatile” than the employer survey used to calculate the monthly payrolls number, according to James Knightley, a chief international economist at Dutch bank ING.
It showed a 470,000 increase in the labor force, of whom only 251,000 found jobs, thus increasing the unemployment rate.
“The increase isn’t all bad news since it was due in part to a second consecutive month of solid labor force growth,” Vanden Houten said, adding that the prime-age labor force participation rate and employment-to-population ratios held steady.
Still, there were cracks in the data.
The report revealed the unemployment rate for Black women ages 20 and over increased from 6.7% in August to 7.5% in September. For adult women overall, the rate increased from 3.8% to 4.2%. In comparison, the unemployment rate for Black men ages 20 and over decreased from 7.1% to 6.6%, and the rate for adult men overall decreased from 4.1% to 4%.
Jasmine Tucker, vice president for research at the National Women’s Law Center, said the September data shows the U.S. economy appears to be contracting, and Black women’s unemployment remains on the rise.
“It is more important than ever that the public has access to key data on how our economy is doing,” Tucker added. “The government shutdown had tremendous costs for millions of Americans, including by targeting programs that provide essential support to women and families.”
When will the BLS release additional data?
The report, originally due out Oct. 3, reflects what was happening before the shutdown began. The labor market may have changed since the data was collected.
The BLS confirmed Wednesday it will not release a full standalone U.S. jobs report for October, saying it will instead release October payroll data alongside a full November report. The agency added the November jobs report, originally due out Dec. 5, will be released Dec. 16 – six days after the Federal Open Market Committee concludes its final two-day meeting of the year.
“A bit on the stale side, the September jobs report was collected two months ago. It’s less than fully satisfying when it comes to understanding the current economy,” Bankrate senior economic analyst Mark Hamrick said in a Nov. 20 note. “The November report, due in mid-December, will offer a fresher sampling of where things really stand.”