Consumer Spending Follows Suit
The September jobs report surprised with nearly double the gains analysts anticipated, picking up more than 336,000. The consensus was for something in the neighborhood of 150,000. The unemployment rate came in at a steady 3.8 percent, up 0.1.
Average wages were up 4.2 percent year over year and down 0.2 month over month.
“Some might interpret these data as a reason to take the risk of a recession off the table, but we don’t agree,” Brian Wesbury, chief economist at First Trust Advisors said in a letter to readers. “The labor market is often a lagging indicator and we expect the economy (real output) to noticeably weaken before employers stop hiring, on net.”
The Federal Reserve likely anticipated another jobs report with numbers under 200,000, and the “hot report” will change the conversation. There are growing concerns that yields are surging as the economy continues to be slow to respond to increased rates. The FOMC meets again in November.
In September Jerome Powell, chairman of the Fed, said it would continue to look for softening in the job market.
“Evidence that the tightness in the labor market is no longer easing could also call for a monetary policy response,” Powell said.
Consumer Spending Up 0.7 Percent
Consumer spending also surprised analysts, doubling expectations. September spending was up 0.7 percent month-to-month and 3.8 percent year-over-year.
Advance estimates of U.S. retail and food services sales for September 2023, adjusted for seasonal variation and holiday and trading-day differences… were nearly $705 billion, up 0.7 percent from August and up 3.8 percent from September last year.
Total sales for July 2023 through September 2023 were up 3.1 percent from the same period a year ago. The July 2023 to August 2023 percent change was revised from up 0.6 percent to up 0.8 percent.
Retail trade sales were up 0.7 percent from August 2023, and up 3 percent compared with the same month last year. Nonstore retailers were up 8.4 percent from last year, while food services and drinking places were up 9.2 percent from September 2022.
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