- Non-farm payrolls projected to grow by 500,000 in September
- Unemployment rate fell from 5.2% to 5.1%
- Average hourly earnings are projected to grow 0.4%
WASHINGTON, Oct 8 (Businesshala) – US job growth likely accelerated in September as the heat wave of COVID-19 infections began to ease, boost demand for high-contact services like eating out, and prompt the Federal Reserve Monthly back in position to start scalping. bond purchase.
The Labor Department’s closely watched employment report on Friday also suggests that the apparently sharp slowdown in economic activity in the third quarter was probably temporary. Nevertheless, the labor market and broader economy are constrained by labor and raw material shortages that have resulted from the pandemic.
“With COVID clearly on the downside again, I think the jobs report should be pretty good,” said James Knightley, ING’s chief international economist in New York. “But there are clearly still tensions in the job market, in which the labor supply story is very constrained.”
According to a Businesshala survey of economists, there is an increase of 500,000 jobs in non-farm payrolls last month, which will drop the employment level of about 4.8 million jobs from its peak in February 2020.
Estimates range from 700,000 jobs to as low as 250,000. The economy added 235,000 jobs in August, the lowest in seven months, with hiring halted in the leisure and hospitality industry. In addition to the delta version, a seasonal quirk was also a drag, and economists expect August payrolls to be revised higher, in keeping with the trend in previous years.
COVID-19 infections in the United States are declining, with an average of 100,815 new infections recorded each day, according to an analysis of data from state and local governments as well as data from health officials.
The September employment report is only available ahead of the Fed’s November 2-3 policy meeting. The US central bank indicated last month that it may begin reducing its monthly bond purchases as early as November.
Fed Chairman Jerome Powell told reporters that “it will take a pretty good employment report” for the central bank’s massive bond-buying program to meet the threshold.
Economists expect the criteria to be met in the September report, which also expects the unemployment rate to drop to 5.1% from 5.2% in August.
The prospect of a taper was raised by a move by the US Senate on Thursday to extend the Treasury Department’s lending authorization until December.
“Any payroll gains over August’s 235,000 increase would check this particular box for the Fed,” said Lou Crandall, chief economist at Wrightson ICAP in New York.
Labor market indicators remained mixed in September. The ADP National Employment Report on Wednesday showed stronger-than-expected growth in private payrolls last month. Between mid-August and mid-September, the number of people on the unemployment list in the state decreased.
But a survey by the conference board last week showed that consumer sentiment about the current labor market situation has softened. While the Institute for Supply Management’s measurement of manufacturing employment rebounded last month, its service industry employment measure slipped.
The economy hit momentum in the third quarter on the back of a summer outbreak of coronavirus cases, a slowdown in the flow of pandemic relief funds from the government and scarce raw materials, which have hit motor vehicle sales.
The Atlanta Fed estimates that GDP growth in the July-September quarter hit a 1.3% annualized rate. The economy grew at 6.7% in the second quarter.
The leisure and hospitality sector led the anticipated pick in hiring last month, reflecting a rebound in payrolls at restaurants and bars, which fell by 42,000 jobs in August. A rebound in hiring is expected as businesses prepare for the holiday season.
Manufacturing employment probably slowed, potentially hampered by a lack of inputs, particularly semiconductors. General Motors (GM.N) and Ford Motor Company (FN) in September announced production cuts at some plants as they manage their chip supplies.
Government payrolls likely as schools fully reopen for in-person learning. There is cautious optimism that a return to classes has increased the share of women in the labor force.
Economists may also be looking at the proportion of the working age population in the labor force for signs of whether the labor shortage was beginning to shrink.
Federal government-funded benefits ended in early September, affecting more than 6 million people. Expanded Benefits, which offered unemployment checks to people who didn’t qualify for regular state jobless benefits, were blamed by businesses and Republicans for the labor shortage.
There were a record 10.9 million job opportunities by the end of July. But it appears that many unemployed have accumulated some money from the government, and hence they are in no hurry to start looking for a job.
Labor force participation rates, or the proportion of working-age Americans who have a job or are looking for one, have barely moved, even as nearly 25 states led by Republican governors expanded this summer. benefits have been exhausted.
Some economists say a significant portion of those out of the labor force have retired, thanks to a strong stock market and record house price gains, boosting household wealth. Self-employment has also increased.
“The current labor shortage will compound this decline significantly, especially after the end of federal benefits programs in September, but we will still expect a million for early retirees and other labor force exits at the end of 2022. Let’s anticipate more hits than that,” he said. Joseph Briggs, an economist at Goldman Sachs in New York.