The Employment Situation for September 2022
Published On: September 6, 2022
Editor's Note: This report is based on survey data from August 2022 that was published in September 2022. This is the most recent data available. (Source: Bureau of Labor Statistics)
The U.S. added about 315K jobs last month, despite a slowing economy and a 0.2% increase in the unemployment rate–bringing it up to 3.7%.
After July produced the lowest unemployment rate in the past 50 years, the only realistic direction for the unemployment rate to go was up, especially given the Federal Reserve’s aggressive interest rate hikes designed to combat inflation.
Despite these factors, most of the increase in the unemployment rate can be attributed to the considerable number of workers who returned to the workforce last month after not having actively sought work in recent weeks. This movement caused the labor force participation rate to tick up by 0.3%.
Although the more than 300K new jobs added do represent a decline relative to the initially reported figures from the past few months, they are strong numbers nonetheless and are in line with economic predictions. In fact, the number of jobs added last month currently exceeds the job data collected for June, which has been revised down by more than 100K jobs to just under 300K.
Among the jobs added last month, more than 20% were in the business and professional services industry, which added 68K additional payroll entries, while the healthcare industry accounted for another 15% of the new jobs, adding 50K. Meanwhile, the retail industry was responsible for nearly 15% of the jobs added, bolstering ranks with about 44K new employees, whereas manufacturers added half that with 22K new positions filled.
The most noteworthy of the industry jobs data, however, is the slowdown in leisure and hospitality hiring that occurred last month. Only 31K jobs were added across the industry, which had averaged more than three times that many new jobs each month of the year so far. Considering that the leisure and hospitality industry is still below its pre-pandemic employment levels by 7.2% (or 1.2 million workers), this hiring slump is an unwelcome outlier.
Two final data points that are always of interest: Average hourly earnings went up by 0.3% last month (up 5.2% over the past year), and the percentage of people working remotely due to pandemic-related issues continued to plummet, down another 0.6% to land at 6.5% for the time being.
Mployer Advisor’s Take:
In total across the U.S., payrolls are now larger than their pre-pandemic levels by almost a quarter of a million jobs, and there are currently twice as many job openings as there are available workers to fill those positions.
Given these dynamics, it’s hard to imagine an imminent slowdown in hiring. Despite some of the other economic indicators trending toward the negative, the above is why more economists are beginning to support the idea that the labor market may be positioned to come out relatively unscathed in the event of a significant economic downturn. That said, there are some indications that the current robust labor market has chinks in its armor. The number of full-time jobs, for instance, suffered a net loss last month but was outpaced by enough new part-time jobs to lead to net positive jobs gain overall.
Given that a softer job market is one of the direct effects that the Fed is hoping to achieve through its interest rate hikes, this latest economic report is a best-case-scenario compromise among the competing interests involved.
For our part, we will be keeping an eye on when and where that balance begins to shift in the months ahead.
Director of Content, Mployer Advisor