Monthly US Employment Analysis - September 2019

September 2019 Monthly US Employment Analysis

Edward Leamer, Professor Emeritus, UCLA Anderson School
October 4, 2019

The September 2019 payroll release of 136,000 jobs is less than the (revised) 168,000 last month, and those who are worrying about the next recession might take that as something more to worry about. But it is difficult to discern the real meaning of that measured decline because the payroll data have some extreme ups and downs, with a big drop followed in the next month by a big increase, or a big decline revised upward in the next month.

The news in these releases can be captured by two smoothed series, one based on just the overall payroll data and another one that includes the components of the payroll data, such as nondurable manufacturing. The actual and the smoothed versions are illustrated in the figure below. Both of the smoothed series are up this month, not down. Don’t despair. The news is actually good.

The right story: During the first half of 2019 the rate of increase in payrolls fell from around 210,000 to around 160,000, but in June, payroll growth stabilized at around 160,000 jobs. September is the fourth month at the same rate. Slow and steady is the news.

Figure 1

UCLA Anderson Forecast