Friday’s jobs report for September was a disappointment, showing the economy adding just 29,000 new payroll jobs and the unemployment rate ticking up to 4.2%.
But the details of the report suggest that the underlying health of commerce is better than it would seem at first glance.
Read on to learn about what the new statistics from the Bureau of Labor Statistics say about the performance of the economy under President Donald Trump.
The underlying reality: Job growth is enough
The headline jobs number can vary randomly from month to month, and is subject to revisions. It is better to look at the average of job gains over the past three months to get a sense of the strength of the labor market.
The trend is not as bad as the weaker headline numbers would make it seem. The three-month moving average of job growth held steady at 51,000 in September, even after downward revisions for the previous two months.
That is enough to keep up with population growth and to keep unemployment trending down.
Perhaps fewer than 10,000 new jobs a month are needed, thanks in large part to Trump’s crackdown on illegal immigration.
The overall employment rate is up
Overall employment rates are near record highs, a sign of economic strength.
The employment-to-population for prime-age workers is, in some ways, a better marker of the health of the labor market than the unemployment rate. It rose to 80.7% in the month.
The unemployment rate applies only to people who are actively looking for work. The employment-to-population ratio includes everyone, so it would reflect people who have given up looking for jobs because they can’t find one.
This statistics shows that, whatever the problems with the U.S. economy, the jobs outlook is not bad.
There is no sign of a recession looming
Friday’s report contains no warning signs that a recession is coming.
Recessions entail a rising unemployment rate, and that has not been happening.
The statistics are not signaling one major recession indicator — namely, when the three-month moving average of the unemployment rate rises half a percentage point relative to its minimum point over the past year. This indicator, known as the Sahm Rule, had signaled the start of all post-war recessions.
The indicator was briefly triggered in mid-2024, but it is not signaling a recession right now.
Federal government employment has dropped under Trump
The Trump administration has tried to cut the federal workforce, and it has succeeded.
The employment reduction has hurt the overall jobs numbers for Trump’s tenure, but it is a positive from the White House team’s point of view.
Federal employment dropped by 1,000 in September and is now down about 328,000 since Trump came into office.
Manufacturing employment is down under Trump
Trump has focused on reviving manufacturing employment, including by imposing large tariffs on trading partners. So far, it has not gone well.
Manufacturing employment was up 9,000 in September, and is down 21,000 since Trump came into office.
Construction employment shows few signs of trouble
Construction is a key sector to watch for signs of trouble in housing. The homebuilding industry has been at risk in recent years because of soaring prices and higher mortgage rates, which have kept some buyers on the sidelines. The sector is also under pressure from Trump’s tariffs and his immigration overhauls.
Construction employment rose 11,000 in September.