5 Things to Know About the Economy This Week
Brakes Slam on Job Growth
Average hourly wages ticked down a penny to $25.09, the unemployment rate remained unchanged at 5.1 percent and the labor force participation rate dropped to a multi-decade low of 62.4 percent.
The number of employed American workers declined by 236,000, and the overall civilian labor force contracted by 350,000.
What It Means:
â€œIn a word, the September numbers were ugly,â€ Curt Long, chief economist at the National Association of Federal Credit Unions, said in a statement Friday. “I think this ends any possibility of the [Federal Reserve] raising rates later this month, chances of which were slim to begin with.”
To put September’s 142,000 additions into perspective, monthly job growth has averaged 198,000 positions so far in 2015. Last year, that monthly average was 260,000.
What’s more, revisions to gains in July and August knocked away nearly 60,000 previously reported positions. Analysts generally expected a sharp upward revision to August’s original 173,000 reported additions. Instead, August’s total was revised down to 136,000.
This is the only big jobs report members of the Federal Open Market Committee will see before their October meeting in Washington, so many expect the soft data to weigh against an interest rate liftoff this month, pushing the decision toÂ December at the earliest.
“From the Fed’s perspectiveÂ â€“Â I imagine they are thinking one word: ‘Phew! Thank goodness we bypassed September,'” Lindsey Piegza, chief economist at Stifel Fixed Income, wrote in a research note Friday. “With twoÂ consecutive months of significant headline weakness, in our opinion, October is very much off the table.”