A Strong Recovery For Payrolls In September

Growth in private-sector payrolls rebounded strongly in September, according to today’s update from the US Labor Department. The revival isn’t particularly surprising (the crowd was expecting a sizable improvement), although the sharply higher gain is reassuring after August’s weak advance. Indeed, the companies added 236,000 jobs last month, a sizable improvement over August’s revised increase of 175,000 (initially reported as a mere 134,000 gain). It’s unclear if today’s print is a sign of stronger growth to come vs. a one-time payback after an unusually soft month. Only time will tell. Meanwhile, the numbers du jour look quite good.

There’s also a bit of improvement in the year-over-year trend. Private-sector jobs increased 2.25% last month vs. a year ago. That’s only marginally above August’s 2.18% gain, although it’s interesting to note that September’s annual pace inched up to the strongest comparison in more than two years. A sign of acceleration in the labor market? It’s still hard to say, although one might conclude that it’s a bit tougher to dismiss the possibility after reviewing today’s figures.


On sounder analytical footing, it’s clear that the labor market continues to rise at a moderate pace. The low-2% annual increase in today’s data has more or less prevailed for the past year or so (only Feb. 2014 suffered a hairline dip under 2.0% in recent history for year-over-year changes). The encouraging trend, in other words, rolls on through September. It only looked wobbly of late via the monthly comparison for August, which is a reminder that it’s essential to focus on the annual change for a more reliable measure of the labor market’s trend. By that standard, nothing much has changed. The economy is still minting jobs at a steady pace.

It would be surprising to learn otherwise anytime soon, based on the upbeat trend that’s prevailed across a broad set of economic and financial indicators. Last month’s update of the US economic profile remained solidly in the positive camp for expecting the recovery to roll forward. We can debate if the degree and depth of the recovery will suffice to repair the lingering damage from the Great Recession in the foreseeable future. But for the moment it remains clear that growth is still intact in a meaningful degree.

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