EmailNonfarm payrolls added 103,000 new jobs in September, up from an upwardly revised 57,000 (from 0) in August. The Briefing.com consensus expected payrolls to increase by 60,000.
The upside surprise in payrolls mostly reflects the end of the Verizon strike in August. That strike reduced the August employment numbers by roughly 45,000 jobs, which were all added back in September. Excluding the Verizon workers, payrolls increased by 58,000 in September and were in-line with consensus expectations.
Private payrolls added 137,000 jobs in September on top of an upwardly revised 42,000 jobs (from 17,000) in August. The consensus expected a private payroll gain of 83,000.
The gains in private payrolls mirror the growth in the September ADP report. That report already showed private payrolls increased by 91,000, but did not include the additional 45,000 workers from the Verizon strike. After adding these workers into the data, the ADP report actually predicted September payrolls to increase by 136,000.
Income growth was sizable in September. Average hourly earnings increased 0.2% while weekly hours increased from 34.2 in August to 34.3 in September. After taking into account the payroll gains, aggregate weekly income increased 0.6% in September. Even adjusting for the Verizon strike, aggregate wages increased 0.5%.
The gains in income are enough to support stable consumption growth.
The unemployment rate remained at 9.1%, exactly what the consensus expected. The number of people entering the workforce was roughly the same as the number of workers who found jobs in September.
The job gains, however, were mostly part-time employment. This led to an increase in underemployment. As a result, the "real" unemployment rate crept up to 16.5% in September from 16.2%.
