United States: Non-Farm Payrolls
BNP Paribas | Oct 18, 2017 04:37AM ET
September put an end to a 83-month long period of employment increase in the US. Even if there is nothing wrong in that sentence it is completely wrong all the same. Admittedly, non-farm payrolls fell by 33,000 in September. This (limited) decline was however entirely due to temporary unemployment because of hurricanes’ disruptions.
The three months to August recorded average job gains of 172,000: we can assume that around 200,000 jobs were missing in September because of weather-related catastrophes and that they will be reappearing in October. Taking into account the 172,000 monthly trend, this means we can expect a whopping 370,000 increase in October non-farm payrolls. This is very likely, even if not that intuitive, that this rebound will come together with yet another deceleration in wages. For one good reason: the September missing jobs were mainly in low-paying industries and this is where they will be showing up again in October. In September, 111,000 jobs were lost in the leisure and hospitality industry that pays an average USD 13.47 an hour, i.e. 61% of the national average. This resulted in an artificial increase in the average hourly earnings and an acceleration in its year-on-year increase (from 2.4% in August to 2.5% in September). Back on the job in October, those low-paid workers will once more weights down on the national average and wage growth will likely come back to 2.3%. In short, you should not be surprise that October exhibits surprising developments in the US labour market.
by Alexandra ESTIOT
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