US DATA: Unemployment Rise Puts FOMC Median Q4 Forecast In Sight

September's Household Survey broadly added to evidence that the labor market is loosening. 

• The 4.44% unemployment rate is the highest since October 2021 (4.32% prior) and was above the consensus expectation of 4.3%.
• With the number of unemployed rising 219k, it's now up 588k in the last 3 months. We haven't seen a 3-month increase like that since May-Jul 2024 (which of course helped encourage the Fed to cut 50bp in September 2024).
• The unemployment rate has now risen by 0.32pp in since June, and suddenly the FOMC's median forecast made in September for a 4.5% unemployment rate in Q4 is in sight.
• Permanent job losers rose 78k, with job losers up 88k and those not on temporary leave up 139k, while job leavers totaled 77k. All of these were multi-month highs.
• Conversely, employment rose 251k, with a net 279k of gains in the last 3 months. But on a Y/Y basis (when adjusting for population controls), employment remained negative.
• Unemployment would have risen to 4.45% had it not been for an increase in the labor force (470k) that brings it up 906k in the last 2 months alone (though overall it remains on a clear growth downtrend); Participation rate rose to a 4-month high 62.5%.
• This leaves the employment-to-population ratio at 59.7%, a 3-month high.
• Somewhat counter-intuitively, the U-6 "underemployment" rate fell 0.1pp to 8.0%, despite all of the other unemployment aggregates (U-1 through U-5) saw an increase in the rate. This came as the number of those working part-time for economic reasons fell 170k, as part of a broader fall in part-time work (-712k total, implying an 824k gain in full-time work, so a sign of strength rather than weakness).