Last month surprised more than one, with the expected rebound not materializing to hit a 194,000 figure, still lower than August’s 235,000 figure. While many will see both figures as a sign of weakness, we have seen previously that this is significantly affected by a lack of labor availability more than the refusal of companies to hire.
Nonetheless, markets will want to see this trend change, as those who lose government benefits choose to work. This time around, we’re looking for a number closer to the 455,000 mark, but it remains to be seen if that will materialize given the recent disappointment.
On the unemployment front, we have seen things move in the right direction despite the volatility of the wage bill. So much so that unemployment has fallen from 7.9% to 4.8% over the past year. Markets expect this trend to continue, with a reading of 4.7% expected on Friday.
It should also be noted that even though unemployment has declined, we also have the potential for an increase in the participation rate which may hold back any improvement in the unemployment rate. With that in mind, also pay attention to the U-6 unemployment measure which provides a broader reading to account for many people who would have dropped out of the headline calculation.