The Bureau of Labor Statistics (BLS) reported that there were 336,000 jobs created in September, nearly double the forecasted amount and the highest since January. Revisions to July and August also added 119,000 jobs (all government) in those months combined. The unemployment rate held steady at 3.8%, just above the expected decline to 3.7%.
What’s the bottom line? There are two reports within the Jobs Report and there is a fundamental difference between them. The Business Survey is where the headline job number comes from, and it’s based predominantly on modeling and estimations. The Household Survey, where the Unemployment Rate comes from, is considered more real-time because it’s derived by calling households to see if they are employed.
The Household Survey has its own job creation component, and it told a completely different story, only showing 86,000 job creations. September’s report also showed sizable increases in multiple job holders (+123,000) and part-time workers (+151,000), while full-time workers fell by 22,000, suggesting some softening in the job market and economy overall.
Remember, the Fed has been hiking its benchmark Fed Funds Rate (which is the overnight borrowing rate for banks) to try to slow the economy and curb inflation. They have been looking for clear signs that the labor market is softening as they consider further rate hikes. Despite some underlying weakness in the data, the strong headline job number raises the risk of another rate hike at the Fed’s next meeting on November 1.