2017 Economic Calendar
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Employment Situation  
Released On 10/6/2017 8:30:00 AM For Sep, 2017
PriorPrior RevisedConsensusConsensus RangeActual
Nonfarm Payrolls - M/M change156,000 169,000 100,000 0  to 140,000 -33,000 
Unemployment Rate - Level4.4 %4.4 %4.3 % to 4.5 %4.2 %
Private Payrolls - M/M change165,000 164,000 117,000 20,000  to 150,000 -40,000 
Manufacturing Payrolls - M/M change36,000 41,000 11,000 -20,000  to 15,000 -1,000 
Participation Rate - level62.9 %62.8 %62.7 % to 62.9 %63.1 %
Average Hourly Earnings - M/M change0.1 %0.2 %0.3 %0.2 % to 0.4 %0.5 %
Average Hourly Earnings - Y/Y change2.5 %2.7 %2.6 %2.5 % to 2.6 %2.9 %
Av Workweek - All Employees34.4 hrs34.4 hrs34.3 hrs to 34.5 hrs34.4 hrs

The Department of Labor can't quantify September's hurricane effects on payrolls or the unemployment rate but they appear to be very dramatic nonetheless. Nonfarm payrolls were negative in September and, at minus 33,000, were well below Econoday's low estimate. But the big surprise in today's report are sudden indications of excessive labor market tightness as the unemployment rate fell 2 tenths to 4.2 percent and average hourly earnings spiked 0.5 percent with the year-on-year rate jumping 4 tenths to 2.9 percent. This report on the surface -- and needing confirmation from the October employment report to follow next month -- appears to change the dynamics for the labor market and suggests that the Federal Reserve, the decline in September payrolls aside, has fallen behind the inflation curve.

The 0.5 percent spike in earnings now matches July, which has been revised 2 tenths higher, as the strongest monthly surge of the expansion. The 2.9 percent yearly rate matches December last year as the expansion high. Revisions here are important and very sharp with August's yearly rate revised 2 tenths higher to 2.7 percent.

The 4.2 percent unemployment rate, derived from a separate set of data that also include the self-employed who are not on payrolls, is not only lowest of the expansion but of the prior expansion as well, going all the way back to January 2001. Here employment, likely reflecting a jump in those now actively looking for work, rose 906,000 at the same time that the number of unemployed fell 331,000. The pool of available workers which includes those who can work but aren't pounding the pavement fell a very sizable 547,000 to 12.429 million. This reading is a sleeper in this report and points squarely at the risk of a wage flash point. The labor participation rate, reflecting the move toward employment, rose 0.2 percent to 63.1 percent to exceed Econoday's high estimate by 2 tenths.

Turning now to payrolls, they were pulled lower by a 104,700 drop at restaurants. Again, the Labor Department says it can't pin this on hurricanes but it does seem likely. Both August and July nonfarm payrolls were revised lower by a net 38,000. Manufacturing payrolls fell 1,000 in September following an upward revised 41,000 surge in August but also following a sharply downward revised 11,000 decline in July. But averaged together and including a 21,000 rise in June, manufacturing is definitely improving and is a further risk to wage inflation.

Other data include, in what perhaps is a surprise given the hurricane disruptions in the South, no change in the workweek, at 34.4 hours in a measure that tracks all private sector employees. Government payrolls are a positive in the report, up 7,000 and making for a 40,000 decline in private payrolls in what, in an aside, is yet another miss for ADP which called here for respectable growth.

The hurricanes are one factor that may or may not have skewed payrolls sharply lower, and probably did, but it's the wage pressures that will make everyone on the FOMC, even the most dovish, suddenly concerned that wage-push inflation has arisen from the dead. The Department of Labor hasn't offered adequate explanations of these results which puts the focus on individual Fedspeak with the chances of a rate hike at the month-end meeting, let alone the December meeting, now likely in play.

Consensus Outlook
September will be the first employment report to register effects from Hurricane Harvey which hit too late in August to affect the data, and also the first to pick up the effects of Hurricane Irma. Going into September's report, nonfarm payroll growth slowed sharply to 156,000 after plus 200,000 showings in both July and June. Econoday's September consensus for nonfarm payrolls is 100,000 though the consensus range is extremely wide, between zero to 140,000. The unemployment rate is seen unchanged at 4.4 percent. Average hourly earnings were very weak in August, at only a 0.1 percent gain, but improvement is seen for September at a consensus 0.3 percent. Year-on-year hourly earnings are expected to come in at 2.6 percent vs August's 2.5 percent. Other calls are for a 117,000 rise in private payrolls vs August's 165,000 in what would reflect a rise in government hiring, an 11,000 gain for manufacturing payrolls following August's big 36,000 surge, a 1 tenth downtick in the labor force participation rate to 62.8 percent, and 34.4 hours for the workweek which would be unchanged.

The most closely watched of all economic indicators, the employment situation is a set of monthly labor market indicators based on two separate reports: the establishment survey which tracks 650,000 worksites and offers the nonfarm payroll and average hourly earnings headlines and the household survey which interviews 60,000 households and generates the unemployment rate.

Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.

The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.  Why Investors Care
During the mature phase of an economic expansion, monthly payrolls gains of 150,000 or so are considered relatively healthy. In the early stages of recovery though, gains are expected to surpass 250,000 per month.
Data Source: Haver Analytics
The unemployment rate measures those who have a job relative to those who are actively looking for a job. During recessions, those actively looking may grow discouraged, dropping out of the workforce and, in a counter- intuitive twist, putting downward pressure on the unemployment rate. During times of economic strength, workforce dropouts may regain their confidence and begin actively looking for a job once again which puts upward pressure on the unemployment rate.
Data Source: Haver Analytics

2017 Release Schedule
Released On: 1/62/33/104/75/56/27/78/49/110/611/312/8
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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