The September 2024 Job Market: A Tale of Two Trends

By Jeff Altman, The Big Game Hunter

As another September rolls around, the Bureau of Labor Statistics (BLS) once again faces its annual challenge: making sense of the labor market’s predictable yet significant swings. This year, September 2024’s data has brought some intriguing insights into the complex world of seasonal adjustments.

The September Phenomenon

Historically, September has been a month of job losses in the private sector. Since 2000, with the exception of the pandemic year of 2020, September has consistently seen a decline in unadjusted private sector employment. The average loss has been around 432,000 jobs (or 405,000 if we include 2020). This pattern is largely due to:

• Students ending summer jobs
• Seasonal positions concluding
• Teachers moving from private to public payrolls as the school year begins

The Magic of Seasonal Adjustments

To account for these expected fluctuations, the BLS applies seasonal adjustments. These adjustments aim to smooth out predictable changes, allowing for a clearer view of underlying employment trends. Since 1948, September adjustments have typically added about 191,000 jobs to the private sector figures. However, in recent years, these adjustments have grown significantly larger, primarily due to the expanding workforce.

September 2024: A Closer Look

This September has proven particularly noteworthy:

• Before seasonal adjustments, private sector employment dropped by approximately 458,000 jobs.
• After applying seasonal adjustments, this transformed into a reported gain of 223,000 jobs.
• The total adjustment of 681,000 jobs stands as the third-largest September adjustment on record, following only 2019 and 2020.

The Political Dimension

With 2024 being an election year, it’s natural to wonder about potential political influences on these numbers. However, historical data reveals some interesting patterns:

• Contrary to what one might expect, September adjustments in election years (averaging 443,000 since 1990) are typically smaller than in non-election years (485,000).
• A partisan gap exists: Since 1990, adjustments under Democratic administrations have averaged 506,000, compared to 395,000 under Republican incumbents.
• This gap has widened since 2000: 572,000 for Democrats vs. 465,000 for Republicans.

These differences likely stem from varying economic policies rather than bias:

• Democratic policies often focus on demand stimulation, which can reduce seasonal job losses.
• Republican policies typically emphasize long-term growth but may not dampen short-term seasonal fluctuations as much.

The Government Employment Factor

While private sector adjustments grab headlines, government employment sees even more dramatic shifts in September:

• Unadjusted government employment surged by 918,000 jobs as educators returned to work.
• After seasonal adjustments, this translated to a modest gain of 31,000 jobs.
• Though not reflective of private sector demand, the spending power of these public employees can indirectly boost private sector employment.

Ⓒ The Big Game Hunter, Inc., Asheville, NC 2024