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September Job Report: Facts and Projections

jobs-reportNext week’s economic calendar will be dominated by September jobs. Experts expect to see a significant rebound from the August data when Friday’s monthly labor report comes out. For August, expectations of 142,000 new jobs created fell short. Last month’s report was weak and broke a six consequent month streak of success in which at minimum, 200,000 new jobs were created.

For the month of September, analysts predict more than 200,000 new jobs will be created. If that happens, healthier figures seen during the spring and summer of 2014 would return. However, the unemployment rate is expected to have a slight dip below the 6.1% level reported last month.

Another prediction comes from economists at IHS Global Insight who believe in September, 231,000 jobs will be created and that for unemployment rate, it will drop to 6%. According to analysts with IHS, there was underwhelming job growth in the last employment report but it is possible for an upward revision.

Most economists, in particular those with the Federal Reserve, will look beyond the reported unemployment rate and number of new jobs created to other statistics that yield a much deeper view of the labor market. For instance, economists will look at the number of hours worked, as well as the amount of wage growth.

For months, wage growth has been stationary and according to policymakers with the Federal government, this inactivity contributed to a rate of inflation less than the set target of 2%.

The bottom line – if working people make more money they will ultimately spend more money. This in turn drives demand for goods but also prices. A healthy economy depends on these two factors being balanced.

This coming Monday, a personal incomes and outlays report is due. This particular report is used to gauge the amount of money taken in each month by consumers, as well as how much is being spent. With this data, economists have the ability to measure whether consumer spending, which accounts for approximately 70% of the US economy, is getting weaker or stronger.

There are other major indicators used to predict economy, which will come out next Wednesday to include the ISM Manufacturing Index, along with a report on Friday pertaining to international trade.

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