Friday, October 4 was an important day in the year 2019. No, it wasn’t a day that will get its own chapter in the history books yet to be written, but it was a big day in terms of how a certain report would forecast the economic future in the near-term. It was a report that’s been more anticipated than other reports of the same kind, due to the ebbs and flows that we’ve seen in the stock market in recent weeks and months, the increasingly hostile trade war with China, and other indications that the economy could be in for a rocky future.
We’re talking about the release of the September Jobs Report, which came out last week. And the results do more than just ease any anxiety about the future of the economy. And while it’s not ideal that the average number of new jobs dipped to 135,000 in September — down from last year’s 223,000 average and the prediction of 145,000 new jobs to the market for the month — the report revealed that unemployment is now at a 50-year low of just 3.5 percent.
In fact, the jobless number dropped 0.2 percent in September from the previous month. The discouraged and underemployed rate also fell about 0.3 percent to 6.9 percent, the lowest it’s been in nearly two decades. Bottom line: While the report missed expectations when it came to new jobs, it exceeded expectations when it came to a lot of other important categories, with the unemployment rate being among the most significant.
Now, it’s worth noting that the report wasn’t all good news, both in jobs added and when it comes to wages. The report states that worker wages have rose about 2.9 percent on the year, which is the lowest this figure has been in more than a year. Unsurprisingly, however, the Dow began the day up 150 points, a direct response to the encouraging September jobs report, and closed the day even stronger.
Labor Market Still Strong
Amid the uncertainty, most economists agree that the September Jobs Report was an encouraging sign of a still strong and vibrant labor market. Minimally, it eases any consumer fears of a recession. At most, it paints an encouraging picture of how the markets and the economy will finish the year and propel into 2020. It’ll also likely prevent the Federal Reserve from making another interest rate cut, though government officials and economists alike seem to be split on whether or not this is a good thing.
Another nice thing about this jobs report is that it comes shortly after a disappointing manufacturing outlook. The manufacturing outlook sparked fears of a recession and caused the Dow Jones Industrial to sink more than 800 points recently as a result. This September jobs report was just what consumers and the markets needed to be reassured that an economic recession isn’t imminent.
The Impeachment Impact
Aside from the potentially volatile factors that we mentioned above (i.e., ebbs and flows of the stock market, trade war with China, etc.), don’t forget that President Donald Trump is also embroiled in a potential impeachment showdown, with House Democrats opening up an inquiry recently. Noting this, it’s only natural for the administration to look at taking advantage of any “wins” that might present itself. In a tit-for-tat battle, it’s these wins that can help influence decision-makers and the public.
Good for Trump?
The answer is both yes and no. While it’s good that recession fears are continuing to be put on hold and that unemployment is the lowest it has been in half a century, the number of jobs that were added can be perceived as a sign that things are slowing down economically. That’s not a good thing. Yes, it’s good that jobs are still being added to the economy, but the report fell short of even the somewhat modest predictions.
In a nutshell, the September Jobs Report should be looked at as a positive for many reasons. Time will tell how sustainable things are from an economic perspective moving forward.
