September Jobs Report Underwhelms, as Finance Sector Slumps

In the latest jobs report ahead of a U.S. mid-term election, the Bureau of Labor Statistics (BLS) revealed that nonfarm payrolls grew by 29,000 in September, while the unemployment rate remained steady at 4.2%. The BLS revised its July data, noting a loss of 10,000 jobs instead of the initially reported 21,000, and adjusted August's figure to 132,000 from the previous 162,000.

Analysts at RBC deemed the 29,000 job gain "quite healthy" in relation to their estimate of 20,000 jobs per month, suggesting the labor market is robust. The gains were widespread, with retirements rather than layoffs likely responsible for the declines, particularly in older workforce sectors. The finance and insurance sector suffered a 7,000 job loss, with credit intermediation and related activities shedding 4,600 positions and insurance carriers and related activities losing 2,300 jobs.

Meanwhile, the information industry saw a more significant decline of 10,000 jobs, with publishing cutting 4,000 jobs and broadcast and content providers losing 3,000. Despite the overall positive trend, the ADP National Employment Report estimates that private employers added 90,000 jobs in September, highlighting strong job creation after a three-month slowdown.

However, financial activities sectors witnessed the largest job losses (-16,000), while professional and business services experienced the second-largest decline (-11,000). Mid-sized firms (50-499 employees) created more than half of the new jobs (54,000), and small companies (1-49 employees) added 23,000 positions. Large companies (over 500 employees) only added 14,000 jobs.

Skeptics argue the economy lacks the foundation for sustained growth, with Michele Evermore, a senior fellow at the National Employment Law Project, expressing concerns about the lack of investment in innovative sectors. Rob Daly covers fintech and the economy.