Week In Review
U.S. payrolls rose by 130,000 in September, while gains for the previous two months were revised up by 45,000. The unemployment rate fell to 3.5%, while participation held steady at 63.2%. Wages were unchanged from August and up 2.9% year-over-year. Manufacturing jobs declined by 2,000. Payroll and wage growth were both less than consensus.
This report indicates that the weakness in the U.S. manufacturing sector is beginning to pressure jobs and wage growth, though not by as much as feared following the weak manufacturing reports from earlier in the week. This release is not likely bad enough to significantly alter expectations for Fed easing, but it does support the recently increased level of concern about the trajectory of U.S. growth in the face of the manufacturing contraction.
The September ISM manufacturing index fell to 47.8 from 49.1.
The ISM index is now at lows last seen in 2009. While the GM strike likely had something to do with this month’s weak reading, manufacturing is clearly contracting and is dangerously close to levels associated with recession. The sector continues to face the headwinds of slow global growth and the U.S.-China trade conflict, which could prevent any meaningful recovery in the near future.
The Chicago Public Library stopped collecting late fees on overdue items beginning on October 1. In addition, all existing late-fee fines will be forgiven. Under the new policy, materials not returned by the due date will be automatically renewed 15 times unless another patron places the item on hold. If the material is not returned after the renewal expires, the user will be charged for a lost item. Chicago is the largest library in the country to move to an overdue fee-free system.
Other cities have eliminated late fees and it has been a net positive. San Diego reported that it had cost more for the library system to keep track of and work to collect late fees compared to the amount of late fees actually collected. Time will tell whether or not this new policy in Chicago will be effective. As Chicago continues to struggle financially, the city cannot afford for this new program to negatively affect the budget.