Imagine a month without the eagerly awaited jobs report—what would it reveal about the economy? The recent shutdown in Washington halted the release of the Bureau of Labor Statistics' (BLS) monthly jobs report, leaving many wondering about the state of the labor market. But here's the surprising part: you might not have missed much. While the BLS went dark, alternative data sources suggest the labor market merely chugged along in September, neither booming nor collapsing.
But here's where it gets controversial... Despite the absence of official data, high-frequency indicators like job postings, private payrolls, and state-level jobless claims paint a picture of a labor market that’s stable, albeit sluggish. The Dow Jones consensus forecast predicted a modest growth of 51,000 nonfarm payroll jobs, with the unemployment rate holding steady at 4.3%. Chicago Federal Reserve President Austan Goolsbee aptly noted, 'We fight with the army we have at moments like this,' emphasizing the importance of piecing together a clear economic picture during data blackouts. The Chicago Fed even stepped in with its own dashboard, offering alternative metrics to fill the BLS void.
And this is the part most people miss... While the unemployment rate remained flat, it teetered on the edge of rising to 4.4%, the highest since October 2021. Yet, this is still historically low. Nongovernmental data echoed similar trends: job availability is shrinking, but employers are hesitant to lay off workers, haunted by the lessons of the Covid pandemic. During that crisis, early layoffs were followed by a scramble to refill positions, with open jobs outnumbering available workers by more than 2 to 1.
However, the labor market isn’t without its cracks. Cory Stahle, senior economist at Indeed, pointed out that new entrants—young workers, recent graduates, and the unemployed—are struggling to find their footing. 'Regardless of the unemployment rate, people taking longer to find jobs is a sign of economic distress for some households,' he said. Indeed’s job postings data revealed a sharper decline than BLS figures, dropping 8.9% year-over-year as of September 26.
Here’s the kicker: the labor market is bifurcated. While health care continues to thrive, other sectors lag. Stahle noted, 'It’s hard to say the labor market is fully in balance when it’s not providing equal opportunities across different occupations.' Similarly, ADP’s private payroll data showed a decline of 32,000 jobs in September, though its reports have sometimes diverged from BLS figures. Meanwhile, spending data from Bank of America and Fiserv’s small business index showed resilience, with steady growth in card outlays and sales transactions.
Yet, not all small businesses are thriving. Bill Dunkelberg, chief economist at the National Federation of Independent Business, highlighted a disconnect: 'There are a lot of firms with job openings, but very few get filled.' This mismatch underscores the complexity of the current economic landscape.
So, what’s the bottom line? The labor market is stable but uneven, with pockets of strength and weakness. While the absence of the BLS report didn’t reveal dramatic shifts, it underscored the need for diverse data sources to understand the economy’s nuances. What do you think? Is the labor market as stable as alternative data suggests, or are we missing critical insights without the BLS report? Share your thoughts in the comments!
