Job Growth Slowing

By SBE Council at 7 October, 2022, 2:47 pm

by Raymond J. Keating –

The September employment report from the U.S. Bureau of Labor Statistics pointed to job growth slowing.

Nonfarm payroll employment (from the establishment survey) grew by 263,000 in September, and that’s still a solid monthly gain. However, it was down from larger gains earlier in the year.

Meanwhile, according to the household survey, employment grew by 204,000 in September. Again, that’s solid under normal circumstances, but it was a marked slowdown from the previous month.

Also, there were some more troubling data from the household survey.

First, the labor force declined slightly in September.

Second, while September experienced a decline in the unemployment rate (from 3.7 percent in August to 3.5 percent in September), with the number of unemployed declining by 261,000, the bulk of that movement came from the fact that those not in the labor force increased by 229,000.

A Fed-Induced Slowdown

If one agrees with the Federal Reserve’s idea that inflation can only be fought by crushing an already bad economy, in particular, by driving down job growth, then this data is exactly what one would want and expect.

As for the rest of us who view the best way of fighting inflation being incentivizing and increasing the supply-side of the economy, that is, via increased entrepreneurship, investment and innovation, then the September employment data merely adds to a large number of concerns.

We continue to face problems with people being outside the labor force, while the Fed actively seeks to worsen the economy, with both the White House and Congress doing the same via higher taxes, increased regulation, trade protectionism and more government spending.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.