Rapid Reaction: September Jobs Report

• The U.S. economy added 156,000 non-farm payroll jobs in September, slightly lower than consensus expectations for a gain of 175,000 non-farm jobs. Construction employment rose by 23,000.
• Despite the gains, the unemployment rate ticked up to 5 percent as the labor participation rate rose.
• Average hours worked per week rose to 34.4 and average hourly earnings rose 0.2 percent form August and 2.6 percent year-over-year.

This morning’s jobs report offered another glimpse into what has been a solid employment picture. Despite creating only 156,000 jobs in September instead of the expected 175,000 jobs, job creation remained at a solid pace. This miss, though, might provide fuel to the “wait and see” mentality when it comes to another rate hike by the Federal Reserve. Unemployment ticked up slightly to 5 percent from 4.9 percent, however with a slight increase in the labor force participation rate this speaks to a rather tight labor market vs. spelling trouble on the wall, as more people came off the sidelines to find jobs. Wages were up 2.6%, in line with the more robust wage growth we have been seeing since 2015. Job creation, low unemployment and wage growth remain essential for the continual recovery in the housing market. These factors spur demand for housing and wage growth, in particular, is essential to combat affordability woes across the country, especially among low-income earners and renters.