It’s easy to get excited about unemployment and the economy when you hear that unemployment is at the lowest level since 1969, the economy is booming and wages are growing. Unfortunately, there is a lot behind the numbers, and just reading the headlines on this report is ill-advised. It was a positive report, but there are some downstream issues that simply should not be ignored.

The U.S. Department of Labor reported on Friday that nonfarm payrolls grew by only 134,000 in September. That was about 50,000 short of expectations, and the lowest growth in months. Sure, there was a hurricane to consider. But one issue that also may have worked against the number was that the two prior months’ reports were revised higher by a combined total of 87,000 jobs. Verdict: if you included the revisions, the number was more or less in-line with expectations.

Unemployment was only 3.7% in September. That’s down from 3.9% in August and was the lowest since December of 1969, when the Labor Department was tabulating people with pencils and paper and using an abacus. The estimate from The Wall Street Journal was 3.8%.

Also worth noting was that the Labor Department counted some 276,000 people who could not work during the reference week due to weather reasons. Thanks a lot, Florence!

The U6 rate, the so-called underemployment rate, went up 0.1 points from August to 7.5% in September.

In the war of employers versus labor, labor is getting its turn, and if it continues it’s going to bite into corporate profits and margins. This is no complaint; it’s just math. Average hourly earnings rose by 0.3% in September and hourly earnings were up 2.8% from September of 2017. The reading on the year-over-year basis was 2.9% in August. And looking forward, think about all the fresh announcements from Walmart, Amazon and others who have raised their minimum wages in recent weeks and months. This translates to higher payrolls ahead as more and more retailers and mom-and-pop shops are forced to lift wages for employees whether the local minimum is lower or not.

Now let’s look at the numbers on an average hourly rate in raw dollars now compared with prior years. Total private sector jobs are averaging a rate of $27.24 per hour as of September. That’s up from $26.51 in September of 2017. At the end of 2012, average hourly earnings were $23.73, and they were $23.25 at the end of 2011.

The average hourly workweek was flat 34.5 hours in September. This number just has not changed much through time.

Another measurement is the number of long-term unemployed, which is a list of workers who have been jobless for 27 weeks or more. These people accounted for 22.9% of all unemployed people and were roughly 1.4 million people in September.

Employment showed little or no change over the month in major industries such as wholesale trade, retail trade, information, financial activities and government jobs. Here was the breakdown of industries and sectors with the big changes in numbers of jobs in September:

• Professional and business services up 54,000 in September and up by 560,000 over the year.
• Health care employment up 26,000 in September and up 302,000 over the year.
• Transportation and warehousing up 24,000 in September and up 174,000 over the year.
• Construction jobs up 23,000 in September and up 315,000 jobs over the past 12 months.
• Manufacturing jobs up 18,000 in September and up 278,000 over the past 12 months.
• Mining jobs up 6,000 over the month and by 53,000 over the year.
• And leisure and hospitality was down by 17,000 over the month.

Among the major worker groups, the unemployment rates were shown as follows:

• Adult men (3.4%)
• Adult women (3.3%)
• Whites (3.3%)
• Teenagers (12.8%)
• Blacks (6.0%)
• Asians (3.5%)
• Hispanics (4.5%)

As you can see, there are many issues behind the numbers that you just don’t get in the headlines. Fortunately, most of the numbers are still looking quite positive for the economy and for the labor market in general.

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