Private nonfarm employers added an estimated net 167,000 payroll jobs in September 2016, seasonally adjusted, in the Bureau of Labor Statistics report issued October 7. Of that increase, 157,000 was in private service-providing industries. This is a change in the employment stock, not a count of every hire: the net total is not a measure of gross recruitment or a promise that every business was expanding. [jobs2016]

The wage measure adds another piece without supplying a complete explanation. Average hourly earnings for all employees on private nonfarm payrolls reached $25.79, six cents higher than August and 2.6 percent above a year earlier. This is an average across payroll employment, not proof that each employee received a raise. Nor does the employment release show that more competition, higher productivity or a particular business policy caused the increase. [jobs2016]

Actual consumer purchases require a different measure. The Bureau of Economic Analysis reported on September 30 that August consumption spending increased less than 0.1 percent in current dollars but declined 0.1 percent after inflation. Lower real spending on durable goods was partly offset by higher spending on services. For a business assessing its market, that split is more useful than treating the national spending total as a uniform demand signal. [income2016]

The practical inference is to keep employment, pay and customer purchases separate when testing an expansion case. These BLS and BEA releases concern September payrolls and August spending; they cannot demonstrate that the reported wage increase generated sales, much less predict one company’s revenue. This October 8 retrospective preserves the releases as reported then. BEA now labels its August income-and-outlays release superseded, and the September payroll estimates were preliminary. [jobs2016][income2016]

Source documents

  1. Personal Income and Outlays, August 2016https://www.bea.gov/news/2016/personal-income-and-outlays-august-2016
  2. Employment Situation, September 2016https://www.bls.gov/news.release/archives/empsit_10072016.htm