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New Jobs Holds Steady As Growth Slows

Oct 4, 2019
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DAVID GREENE, HOST:

We're getting fresh news from the Labor Department this morning on the job situation in the country. U.S. employers added 136,000 jobs last month. That is a sign that the job market is holding pretty steady after a week of some ominous signals of an economic slowdown. The already low unemployment rate fell even lower. The jobless rate dropped to 3.5%. That is the lowest it has been in nearly 50 years. Let's bring in NPR's Scott Horsley to talk about this. Good morning, Scott.

SCOTT HORSLEY, BYLINE: Good morning, David.

GREENE: OK. So employers are still hiring. Is that what we should read from these numbers?

HORSLEY: They are still hiring but at a slower pace. In addition to the 136,000 jobs added in September, the jobs numbers for July and August were revised upwards by a total of 45,000. So if you average out the last three months, we're seeing employers add about 157,000 jobs a month. That's pretty solid. It is down from this time last year, but it suggests a sort of gradual deceleration, not a sharp drop in hiring. And it's good to see that resilience in the labor market because, as you mentioned, we've gotten some other signs this week that were not so positive.

GREENE: Yeah. People have been talking about some signs of stuff going in the wrong direction. What exactly are those signs? What are we seeing?

HORSLEY: On Tuesday, we got an index of factory activity showing the second straight month of contraction in manufacturing. And that is reflected in today's jobs report. We saw manufacturers shedding another 2,000 jobs in September. We've also seen slower growth on the much larger services side of the economy, not an actual contraction as with factories but slower growth. Overall, the economy grew at an annual rate of just 2% in the second quarter. And it may have been slower, still, in the third quarter, which just ended. Manufacturing, of course, is particularly vulnerable to global forces like the president's trade war. But senior economist Tim Quinlan of Wells Fargo Securities says, the story doesn't stop there.

TIM QUINLAN: I think generally, what this is telling you is that amid this narrative that the weakness is concentrated specifically in the manufacturing sector, it's now clearly spread to other parts of the economy.

HORSLEY: Private sector employers added only 114,000 jobs in September. We did see 22,000 government jobs added. And we're told, unlike August, most of those were not temporary census jobs.

GREENE: OK. But then, Scott, we have this this unemployment number that everyone always points to. Despite this slowdown you're talking about in hiring, the unemployment rate keeps going down.

HORSLEY: That's right. The unemployment rate is compiled from a different survey, and it's telling a somewhat different story - 3.5% jobless rate. That's very low. And we do hear from some employers who say they're having trouble finding workers. At the same time, you're not seeing much upward pressure on wages. Over the last year, wages rose just 2.9%. That's actually down a bit from previous months. So it's a tight labor market but certainly not an overheating one, and that may give the Federal Reserve some breathing room to cut interest rates again later this month. A lot of investors seem to be anticipating that.

GREENE: Anything else standing out as you look at this report?

HORSLEY: We continue to see steep losses in the retail sector, another 11,000 retail jobs lost in September. Over the last couple of years, we've seen nearly 200,000 jobs shed in retailers. It's not because consumers aren't spending money. They're just not spending it in traditional brick-and-mortar stores. We'll see how consumer spending holds up. So far, that's been the most resilient part of the U.S. economy.

GREENE: NPR's Scott Horsley for us this morning. Thanks as always, Scott.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.