September jobs report: Summer weather sticks around
Daniel Zhao
Chief Economist at Glassdoor | Oct 4, 2024
The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor’s Lead Economist Daniel Zhao.
Summer is sticking around for another month as the September jobs report came in hotter than expected. Jobs growth jumped up and unemployment fell in September, signaling that the job market still has some runway to achieve a soft landing. The report is resoundingly positive with even indicators that are flashing warning signs (like the unemployment rate) improving in September. The strength of this report likely defuses calls for the Federal Reserve to cut another 50 basis points. While the report does not guarantee that we’re in the clear, it is a welcome sigh of relief after some concerning jobs reports in the last few months.
Key stats:
- Growth in payroll employment came in at 254,000 in September, up from 159,000 in August. The BLS noted that Hurricane Francine had little impact on the report. Hurricane Helene happened too late in the month to impact this report, but may have an impact in October.
- The unemployment rate fell to 4.1% in September, up from 4.2% in August, a welcome relief after several months of increases over the summer.
- Average hourly earnings growth firmed to 4% in September. High productivity growth and other indicators of a cooling job market mean wage growth is not a concern right now for any resurgence of inflation.
Unemployment falls though warning sign still flashes
The unemployment rate fell in September, though it remains at the key Sahm rule recession indicator threshold, which is still flashing a warning sign for the labor market. The concern with a rising unemployment rate is always that it spirals into a self-reinforcing cycle of unemployment increases. But the improvement shows that the worst case has not yet come to pass.
The fall in unemployment was also married with ongoing strength in prime-age employment-population ratio which ties its 2023 peak and remains at the highest levels the job market has seen since the turn of the century. Employment remains stable even as unemployment rises because the recent increase in unemployment has been driven less by layoffs and more by difficulty new entrants or reentrants to the workforce have faced in finding a job. That difficulty is not something to ignore, but this is a reminder that layoffs have remained relatively low by historical standards.
Non-education government jobs growth slows
The largest drivers of jobs growth continue to be health care & social assistance, leisure & hospitality and education. Interestingly, non-education government has slowed dramatically from adding 34,000 a month in H1 2024 to just 7,000 in Q3 2024. Professional & business services and information both perked up in September, though they remain weak compared to their stronger growth in 2021.
Construction jobs growth remains structurally sound
Surprisingly, construction jobs growth remains resilient with 25,000 jobs added in September. Even as the Federal Reserve raised interest rates, construction jobs growth has averaged a very consistent 21,000 since the beginning of 2022, hardly showing the impact of the interest rate increases.
While it is encouraging that the job market and the construction industry specifically were able to withstand the rising interest rates, this also suggests there may not be much room for lower interest rates to immediately boost jobs growth through the housing market.
Teens face a weaker job market
The teen unemployment rate increased to 14.3% in September, up from 14.1% in August and now at its highest level since January 2021. The increase could be yet another example of how sluggish hiring is hurting entry level workers more. Low layoffs mean workers with jobs currently may not be feeling the consequences of a weaker job market as much as workers who are trying to find a job now like new grads or workforce reentrants.
To speak with Daniel Zhao about this report, please contact pr@glassdoor.com.
Daniel Zhao
Daniel Zhao is Chief Economist at Glassdoor. On Glassdoor's Economic Research team, he has conducted research using Glassdoor's unique data on a variety of topics affecting job seekers and employers ranging from the health of the job market to pay transparency to employee engagement & retention. His work has been cited in publications like the New York Times, the Harvard Business Review and more. Prior to joining the Economic Research team, he also worked on improving the user experience for Glassdoor’s consumer jobs product and mobile app. He holds a bachelor's degree in applied mathematics and economics from Harvard College.
