EmailPayrolls fell from an upwardly revised 142,000 (from 96,000) in August to 114,000 in September. The Briefing.com consensus pegged the payroll growth at 120,000. While the media may be concentrating on the fact that payroll levels deteriorated in September, the underlying trends in the data were extremely positive. Preliminary benchmark revisions now show that the BLS underreported payroll gains for much of the year. Payrolls were originally reported as averaging 140,000 new jobs a month in 2012. The new data show that payrolls actually increased by 150,000 from January through August. That level is consistent with an initial claims level that has been bounded between 350,000 and 400,000 for the past several months. After taking into account the revisions, the decline in payrolls versus August does not look poor.
Furthermore, hourly earnings rose 0.3% in September after remaining flat in August and the average workweek rose to 34.5 from 34.4. Altogether, the gains in earnings, the workweek, and payrolls drove aggregate wages up 0.7%. That was the biggest increase in aggregate wages since February and is easily large enough to support a boost in consumption levels. The unemployment rate fell to 7.8% in September from 8.1% in August. That is the first time the unemployment rate has fallen below 8% since January 2009. The consensus expected the unemployment rate to remain at 8.1%. The dip in the unemployment rate was the result of a substantial gain in employment levels (+873,000). The labor force and the labor force participation rate both increased in September. Unfortunately, most of those new jobs came from workers finding part-time jobs (+582,000) even though they would have rather found full-time employment. Still, having a part-time job is preferable to not having a job.
