Friday, October 06, 2006

September Employment Report

by Bill McBride on 10/06/2006 10:17:00 AM

The BLS reports: U.S. nonfarm payrolls climbed by 51,000 in September, after a revised 188,000 gain in August, and the unemployment rate fell slightly to 4.6% in September from 4.7% in August.

Click on graph for larger image.

Here is the cumulative nonfarm job growth for Bush's 2nd term. The gray area represents the expected job growth (from 6 million to 10 million jobs over the four year term). Job growth is about in the middle of the expected range.

The following two graphs are the areas I've been watching closely: residential construction and retail employment.


Residential construction employment decreased by 15,100 jobs in September and is down 54.1 thousand, or about 1.6%, from the peak in February. This is the beginning of the loss of several hundred thousand residential construction jobs over the next year or so.

Note the scale doesn't start from zero: this is to better show the change in employment.


Retail employment declined 11,900 jobs in September. The YoY change in retail employment is now -0.5%.

The YoY decrease in retail employment is concerning: see Retail Employment

It appears the expected job losses in residential construction employment has started. I expect the rate of losses to pick up in the coming months. Overall, the upwards revision to the August report offset the weak September report.