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Economy in Brief

U.S. Job Creation Disappointing in September, Hurricane Effects Small
by Tom Moeller October 8, 2004

Nonfarm payrolls grew 96,000 last month following a downwardly revised 128,000 August increase. Consensus expectations had been for a 150,000 job gain in September.

The four hurricanes which struck the US during August and September were estimated to not have had a significant effect on job growth. Jobs lost due to severe weather were offset by hiring for recovery efforts.

The employment report from the Bureau of Labor Statistics indicated that "At the national level, the severe weather appears to have held down employment growth, but not enough to change materially the Bureau's assessment of the employment situation in September."

Factory sector payrolls fell by 18,000 (+0.1% y/y), the first monthly decline since June. A moderate 0.1% (-1.7% y/y) fall in nondurable industries hiring reflected sharp declines in textile mills (-6.4% y/y) and apparel (-5.7% y/y), offset by gains elsewhere. Hiring in durable goods industries was down broadly, 0.1% m/m, but up 1.2% y/y. Construction sector hiring grew a modest 4,000 (2.6% y/y).

Hiring in private service producing industries rose a modest 72,000 (1.6% y/y). Jobs in the financial sector rose another 28,000 m/m (1.1% y/y). Hiring in professional & business services grew 34,000 (3.0% y/y) and temporary help services jobs grew 33,000 (9.6% y/y).

The index of aggregate hours worked (employment times hours worked) in September rose 0.1% (2.4% y/y) for the second consecutive month and in the third quarter grew 3.2% (AR) from 2Q.

Average hourly earnings rose 0.2% (2.4% y/y).

From the separate household survey, the unemployment rate held steady at 5.4%. Employment fell 201,000 (+1.3% y/y) but the labor force also fell by 221,000 (+0.6% y/y), the second consecutive down month, as the labor force participation rate slipped to 65.9%. The Labor Department indicated that "In the household survey, people who miss work for weather-related events are counted as employed whether or not they are paid for the time off."

Employment Sept Aug Y/Y 2003 2002 2001
Payroll Employment 96,000 128,000 1.3% -0.3% -1.1% 0.0%
  Manufacturing 18,000 4,000 0.1% -4.8% -7.2% -4.8%
Average Weekly Hours 33.8 33.8 33.6 33.7 33.8 34.0
Average Hourly Earnings 0.2% 0.3% 2.4% 2.7% 2.9% 3.8%
Unemployment Rate 5.4% 5.4% 6.1% 6.0% 5.8% 4.8%
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