The unemployment rate
September’s unemployment rate stood at 5.1%, which did not change from the previous month, but on a YTD (year-to-date) basis it is the lowest of the year. September’s total non-farm payroll employment was 142,000, which came mostly from the information technology and healthcare sectors. The mining sector had the highest decline in employment. This decline is mostly due to shrinking global demand and the dollar getting stronger.
Average hourly earnings on private non-farm payrolls decreased by 1 cent, whereas average private earnings of private-sector production and non-supervisory employees stood flat from August. This was a disappointment in the market as economists had expected an increase of 0.2% in hourly earnings.
As these labor statistics are highly important for making monetary decisions, the Fed (Federal Reserve) depends heavily on these numbers. Disappointing labor data raises questions on the possibility of an interest rate increase by the dovish Fed.
The retail sector is also impacted by labor conditions in the economy, as higher employment and higher earnings lead to higher spending. The SPDR S&P Retail ETF (XRT) rose by 1.76% on release of the data, as did stocks such as Macy’s (M), Nordstrom (JWN), Dollar Tree (DLTR), and Procter & Gamble (PG).