September Jobs Report Commentary from MBA's Mike Fratantoni

The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in September.

--

“There was a moderate increase in payroll employment in September, with the jobs number up by 119,000.  As in recent months, most of the gains were in just a few sectors, including health care and the leisure and hospitality sector. Federal government employment has declined by almost 100,000 since January due to job cuts. Payroll employment was revised down by 33,000 for July and August, resulting in a decline for August rather than a small gain, as initially reported.

“Wage growth was at 3.8 percent over the last year and 0.2 percent in September, which was a decrease compared to the prior month.

“The unemployment rate increased to 4.4% in September. Individuals who lose a job continue to have more challenges finding a new one, with the average duration of unemployment at 24.1 weeks.

“Despite the larger-than-expected increase in payroll employment in September, on net, this report aligns with other data showing a somewhat softer labor market, but not one that is rapidly declining in strength. Although these data are not as timely as usual, they should still help inform the FOMC’s December decision regarding a potential cut. We expect another 25-basis-point cut in December, but also expect a number of dissenting views from FOMC members who will vote to hold rates.

“The other important takeaway from this report for the housing market is that wages are growing faster than both rents and home prices in many parts of the country, which helps to improve affordability.