Hello, everyone.
I'm Daniel Culbertson, economist with the Indeed Hiring Lab.
And it is time for another US labor market update.
As always, there's a lot to cover, so let's go ahead
and get right to it.
As they always do at the beginning of the month,
the US Bureau of Labor Statistics
released their Employment Situation Report,
otherwise known as the Jobs Report.
And inside of this report, we get a lot of great data
about the labor market covering up to the previous month.
So for September, there is some good news in the report,
but there are also some aspects of it
that were a bit concerning.
Perhaps the biggest piece of news
was that, in September, the US economy added 661,000 jobs.
Driving this employment growth was hiring inside
of leisure and hospitality, retail, and health care,
while job losses inside of state and local government mainly
pertaining to education were a bit of a drag on growth.
A one-month jobs gain of 661,000 is an incredibly large number
but still, in this particular moment in time,
there are some aspects of this number that
are a bit concerning, mainly that this marks
the third consecutive month that job growth inside the United
States has slowed.
And you can see this in this chart here,
which is showing total payrolls inside the United States.
Far on the right side of this chart,
you can see the uptick that we have experienced in the labor
market since the start of the recovery from COVID-19.
And at the very right side of this chart,
over the past couple months, you can see job growth
beginning to taper off.
This in and of itself is rather concerning,
but especially when you consider that we are still
10.7 million jobs shy of where we were before all
this started in February of 2020.
This is very worrisome.
You typically don't want to see job growth slow down
this early in the recovery, so this is certainly something
that we hope to see pick up in the near future.
Another big piece of news from this report
has to do with the unemployment rate.
Now, the Bureau of Labor Statistics
measures the unemployment rate in several different ways,
but the one that is talked about most, otherwise known
as the Headline Unemployment Rate,
declined again in September to 7.9%.
This marks the fifth consecutive month
that the unemployment rate has declined,
but there is also something worrisome in the unemployment
rate data as well.
On this chart here, which is showing the Headline
Unemployment Rate with the blue line,
this chart is also showing the core unemployment rate
with the orange line.
And the core unemployment rate is essentially the Headline
Unemployment Rate, but it is factoring out
all temporary workers.
So it gives us a better look at sustained unemployment.
And as you can see on this chart,
the core unemployment rate in the month of September
rose to 6.1%.
And this is the highest it's been
since the start of this crisis.
Economists will be keeping a close eye
on the core unemployment rate.
Because at the start of this crisis,
many people who were falling into unemployment
considered themselves to be temporarily unemployed,
meaning that they felt they had a job
to go back to once the economy began to reopen.
But with the core unemployment rate rising, what this means
is that more and more people are falling
into what we consider permanent unemployment
or at least permanently becoming detached
from their previous job.
And this is something that is obviously very concerning
for the long-term health of the labor market.
And again, the core unemployment rate
is something that economists will
be watching very closely as we continue through this recovery.
Lastly, I'd like to cover a trend
that we have been watching very closely in Indeed's own data,
and that is the overall trend in job postings on our site, which
is a real-time measure of labor market activity.
On this chart here, we are showing the overall trend
in job postings on our site over the past couple years.
And for each trend line on this graph,
every year is indexed to February 1.
And we do that just so all these trend
lines start at the same point and we
can get a sense of how these trend lines differ
as we move through the year.
With the yellow line on this chart,
you can see just how different 2020 has been.
In mid-March, once COVID-19 becomes a problem,
we begin to see job postings on our site fall
rather drastically.
They continue to fall until about May.
And since then, we have seen more or less steady but rather
slow improvement in the total count of job postings
on our site.
As of October 2, we are now only 16% behind last year's trend.
So it's great news that we're getting
so close to last year's trend.
And it's especially great news that job postings have
continued to tick up heading into October considering,
as you can see on the chart here, in August and September,
job postings began to level off for a bit.
So in summary, there was some good news inside
of the jobs report for the month of September.
However, there were some concerning aspects
that economists will be keeping an eye on
as we move through this recovery.
And then Indeed's own job posting data,
we are continuing to see employers get back
into the labor market, looking to hire new workers,
which overall, obviously, is a great sign for the labor
market.
Until next time, take care and thank you for tuning in.