What’s Going On Here?

• US economy added 136,000 jobs in September;
• While that was fewer than economists predicted, the country’s unemployment rate also fell to 3.5%: a 50-year low.

What Does This Mean?

• Investors largely ignored the disappointing job additions – perhaps because
  • the official estimates for job growth in previous months were simultaneously increased;
  • those that were added may be more permanent: only 1,000 September hires were due to preparations for next year’s US census, compared to 25,000 in August.
• There wasn’t much change in the number of people available to work last month, but more of them found jobs – which helped lower the unemployment rate.
• More working people bodes well: they’ll receive salaries which they can spend on sustaining the US’s longest-ever period of economic expansion.

Why Should I Care?

For markets: Stuck in the middle.

• Between Friday’s jobs data and the surprisingly weak US manufacturing and services industry survey results published last week, investors didn’t know whether they were coming or going: they sold off stocks early last week, only to buy them back by the time Saturday rolled around.
• Some had predicted a weaker US economy might lead its central bank to lower the country’s interest rates again this month, giving stock prices a boost – although solid job creation may now make that less likely.

The bigger picture: America, you’ll have to WeWork harder.

• The hammer hasn’t fallen just yet, but future US jobs data will have to pedal uphill against announced job cuts from under-fire coworking space company WeWork. It’s shortly putting 2,000 employees – a quarter of its workforce – OutOfWork.
• Likewise Silicon Valley tech company HP: it’s flagged 9,000 job cuts (16% of its staff) to come over the next few years in order to reduce costs.
• And these companies aren’t alone: in September, US retailers shed employees for the eighth month in a row.

Content source: Finimize. (2019) A Jobbing Economy. Available from: https://www.finimize.com/wp/news/a-jobbing-economy/ [Accessed 07 October, 2019]