This morning the Bureau of Labor Statistics of the U. S. Department of Labor issued its report on the employment situation for September. The jobless rate has shown little change over the past several months. September's rate was 5.6%, unchanged from August. Nonfarm payroll employment increased by 121,000 to 117.0 million. Services and retail trade had job gains, but manufacturing employment decreased. Manufacturers attributed this to ongoing efforts to reduce excess inventories.

Employment is a fundamental measure of the interaction between individuals and the economy as a whole. Most individuals depend upon employment for most of their income. If I'm unemployed I can't contribute to the economy by buying the homes, cars, and TV sets produced by those who are employed. Conversely, if I have a job, then when I spend my income from that job I will be contributing to the further strength of the economy.

The total number of employed persons has been rising steadily since just after the 1990-91 recession. This year nonfarm employment increased during the second and third quarters. During the third quarter the employment number for each month exceeded that for the preceding month. Comparing the average rate of employment for the third quarter with that of the first quarter reveals an annualized growth rate of 1.23%. So, what we have here is yet another manifestation of the phenomenon of slow, steady economic growth.

Stock and bond market participants took their cue from the slow growth in employment. Both markets closed little changed for the day.

Byline: Lafferty (MF Merlin)