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Here’s what to watch in the September jobs report

Economists forecast 200,000 new jobs, 5.1% unemployment rate

With job openings at an all-time high and layoffs at the lowest level since Richard Nixon was president, don’t expect hiring in the U.S. to fall off a cliff in September.

Forecasters polled by MarketWatch see another 200,000 gain in new jobs in September, keeping the U.S. on track to add at least 2 million jobs for the 5th year in a row. Here are five things to watch in the government’s employment report due Friday morning.

The top line

The U.S. has added an average of 212,000 jobs through the first eight months of 2015, a healthy number even though the pace of hiring has slowed from 2014. Last year, the economy generated an average of 260,000 jobs a month, the strongest gain since 1999, according to the Bureau of Labor Statistics.

Economists expect another increase of 200,000 or more in September, based on the record number of job openings. The unemployment rate is likely to remain unchanged at a seven-year low of 5.1%.

August redux

The final employment report of the summer appeared to show a surprising slowdown in hiring in August. However, the initially reported 173,000 gain — down from 245,000 in both July and June — is expected to be revised higher.

How come? The preliminary report has undercounted the number of new jobs created in August by an average of 60,000 in recent years. Many businesspeople who take part in the government survey go on vacation, and they are slow to return their answers. That’s especially true of smaller businesses.

William Dunkelberg, chief economist of the National Federation of Independent Business, said small businesses are hiring more people that the government’s official report suggests.

“We should expect a major upward revision in August’s BLS number because there was no evidence in NFIB’s data that job creation slacked off sharply from June and July,” he said.

Full employment

The shrinking unemployment rate, on the cusp of falling below 5%, has spawned plenty of hand-wringing among economists and Federal Reserve bigwigs. They worry the labor market is reaching what’s known as “full employment,” when the labor market gets so tight that wages surge and higher inflation breaks out.

Yet the labor market may not be as tight as the 5.1% unemployment rate implies. An alternative rate known as the U6 puts unemployment at 10.3%. The rate including all the people who say they want a full-time job but can’t find one, a number that still tops 16 million. That’s an unusually high level after more than six years of economic expansion.

http://www.marketwatch.com/story/heres-what-to-watch-in-the-...