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Affluent Christian Investor | October 17, 2017

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Dig In: There’s Actually Some Good News in the September Jobs Report

With Hurricanes Irma and Harvey, the data in the latest jobs report for September from the U.S. Bureau of Labor Statistics have to be viewed carefully. And when we get to the data mainly unaffected by these terrible storms, good news emerges.

First, it’s important to understand that the jobs report is actually two reports. One is the establishment, or payroll, survey, and the second is the household survey. News outlets usually lead with the results from the payroll survey when talking about employment gains or losses.

Meanwhile, the household survey actually gives us the widely-quoted unemployment rate. For good measure, the household survey also tends to better pick up startup and small business jobs numbers, but also is more volatile from month to month.

Now, having said that, this month’s employment report notes the following:

“Our analysis suggests that the net effect of these hurricanes was to reduce the estimate of total nonfarm payroll employment for September. There was no discernible effect on the national unemployment rate… In the establishment survey, employees who are not paid for the pay period that includes the 12th of the month are not counted as employed. In the household survey, persons with a job are counted as employed even if they miss work for the entire survey reference week (the week including the 12th of the month), regardless of whether or not they are paid.”

Therefore, the establishment survey – which reported a decline of 33,000 in nonfarm payroll employment – cannot be considered reliable for the month of September.

However, the household survey, arguably, is impacted far less, if at all, by the storms. And the numbers from this survey – again, understanding the greater volatility month to month – were off-the-charts positive for September. Specifically, the household survey showed:

• Job Gains: A 906,000 increase in the number of employed in September (with gains in three of the last four months);

• Labor Force Gains: A 575,000 gain in the labor force in September (with growth in four consecutive months now); also, a decline of 368,000 in those not in the labor force in September;

• Labor Force Participation: An increase in the labor force participation rate from 62.9 percent in August to 63.1 percent in September (the highest rate in four years);

• Employment-Population Ratio: An increase in the employment-population ratio from 60.1 percent in August to 60.4 percent in September (the highest rate in over eight years);

• Self-Employment & Entrepreneurship Gains: On the entrepreneurship front, the number of unincorporated self-employed, after suffering a big drop earlier this year from February to July, has now bounced back, gaining 142,000 in August and another 278,000 in September.

Again, questions lurk given the storms and their aftermath, but in terms of the more reliable look at jobs via the household survey, September was a very positive month on the jobs front. Let’s hope that this turns into an extended trend.

 

 

Originally published on SBE Council.

Raymond J. Keating is chief economist for a national small business organization; a weekly columnist with Long Island Business News; a former Newsday weekly columnist; and an adjunct professor in the MBA program at the Townsend School of Business at Dowling College.

Author of numerous books, his latest business and policy books are “Chuck” vs. the Business World: Business Tips on TV and Unleashing Small Business Through IP: Protecting Intellectual Property, Driving Entrepreneurship. Keating also is a novelist, penning a series of Pastor Stephen Grant thrillers.

His articles have appeared in a wide range of additional periodicals, including The New York Times, The Wall Street Journal, The Washington Post, New York Post, Los Angeles Daily News, The Boston Globe, National Review, The Washington Times, Investor’s Business Daily, New York Daily News, Detroit Free Press, Chicago Tribune, Providence Journal Bulletin, and Cincinnati Enquirer.

 

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