Today’s Nonfarm Payrolls number was a big disappointment, coming in at 142,000 total jobs added versus 201,000 expected.  Over the last few months, the breadth of jobs gains has slowed, as shown in the chart below, which shows green when a sector adds jobs or red when a sector loses jobs.  Grey indicates no change.

The biggest weight on jobs creation was manufacturing.  Goods-producing industries (in aggregate) and Manufacturing specifically both printed MoM changes in employment in the 8th percentile over the last three years, while service industries’ gains were in the 17th percentile.  Government was a notable boost, with one of its strongest gains in quite some time, adding 24,000 jobs including 17,000 at the state.

With manufacturing weak, below we show the relationship between the strength of the USD and manufacturing employment.  We show both as YoY percentage change.  A stronger dollar isn’t the only driver of manufacturing jobs, of course, but the reality is that weak global demand and a strong currency are doubly painful for US exporters.

Our final chart, bottom, shows that while manufacturing as a whole isn’t looking too good, the auto sector should continue to be a key driver of growth in the goods economy.  The share of workers at auto or auto parts manufacturing firms rose to a new post-recession high in September, tracking auto sales higher.  For more detailed analysis of the Employment Situation Report, make sure to check out The Bespoke Report tonight; you’ll get it if you start a free trial at any of our subscription tiers.

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