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US nonfarm payrolls rose by a seasonally adjusted 103,000 in March, while the more robust numbers from January and February were revised downward by a cumulative 50,000 in Friday’s monthly report from the Bureau of Labor Statistics, representing a marked decline from February, when the workforce grew at the strongest monthly rate since July 2016. The unemployment rate held steady at 4.1 percent for a sixth month, still the lowest since December 2000, while wages rose only slightly, by 8 cents an hour for a year-over-year increase of 2.7 percent.
Labor force participation fell incrementally from 63.0 percent in February to 62.9 percent in March. That’s better than the recent low of 62.3 percent in 2015, but the rate remains nearly the lowest the US has seen since the late 1970s, the Wall Street Journal’s Eric Morath observes. With the economy at approximately full employment, the government and employers alike are hoping to entice more non-working Americans off the sidelines, but have had limited success so far in that endeavor.
Friday’s numbers fell short of expectations. Economists surveyed by the Journal had predicted 178,000 new jobs and an unemployment rate of 4.0 percent. ADP’s independent monthly report, released on Wednesday, said companies had added 241,000 jobs last month. ADP’s numbers always tend to be higher those from the BLS, but this month’s divergence is unusually wide.
One possible factor in March’s sharp decline is the weather: The US was hit with a series of late winter storms this year, and as Washington Post economics correspondent Heather Long noted, there was major snowfall the week the BLS conducted its survey, which may have depressed its count and could mean these figures will be revised upward in future reports.
For Ben Casselman, economics reporter at the New York Times, the big-picture takeaways from the jobs numbers in early 2018 are that wage growth is still slower than economists would tend to expect and would like to see given the tightness of the labor market, and that while labor force participation isn’t falling off due to retirements in an aging workforce, Americans are not returning to the workforce in sufficient numbers to fill the shortages in the labor pool:
Total nonfarm employment in the US grew by 200,000 jobs last month, while the unemployment rate held steady at a historically low 4.1 percent, according to January’s employment numbers from the Bureau of Labor Statistics. The highlight of last month’s jobs data, however, was the increase in average hourly earnings, which rose by nine cents to $26.74, following an 11-cent gain in December. Over the past year, average earnings increased by 75 cents or 2.9 percent. That’s the largest year-on-year gain since June 2009, Reuters reports, though the average workweek fell slightly in January to 34.3 hours, canceling out some of these wage gains.
Reuters adds that the strong jobs data increase the likelihood that the Federal Reserve will raise its benchmark interest rate several times this year, perhaps more than the three hikes it was already planning:
“This report supports the Fed’s contention that the jobs market is nearing full capacity and wage and inflation pressure has begun to make its way into the data,” said Marvin Loh, senior global market strategist at BNY Mellon in Boston. “With almost full odds priced in for a March rate hike, investors have moved towards the second, third, or even possible fourth rate hike this year.”
A separate set of Labor Department figures released earlier in the week found that total US employee compensation costs increased by 2.8 percent across 2017, Bloomberg reported, with several industries, including transportation and service occupations. showing increases of over 3 percent—a sign of a competitive labor market.
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Two studies released this week show that US employers have more robust hiring plans this year compared to last year. CareerBuilder’s annual forecast, a survey of over 800 hiring managers and HR professionals, found that 44 percent of companies are hiring for full-time roles in 2018, up four percent from 2017. Additionally, Roy Maurer of SHRM notes that the ManpowerGroup’s latest employment forecast has the strongest Q1 hiring outlook since 2001.
The CareerBuilder survey found that employers in the western states (49 percent) and the northeast corridor (47 percent) are the most likely to be hiring at the moment, while also outlining some key trends that appear likely to shape talent acquisition in the new year. One of those trends is the movement to get in early with talent, as 64 percent of companies that are hiring will be looking to add recent college graduates to their ranks. Almost a quarter of them will be looking internationally to fill positions, although this strategy may be complicated by the Trump administration’s efforts to tighten immigration controls and reduce the use of skilled worker visas like the H-1B. Perhaps most notably, 30 percent of companies say they plan on increasing compensation for new employees by five percent or more and 36 percent intend to do so for current staff.
The survey also pointed to challenges employers are having in filling openings, with 58 percent reporting that they’ve had jobs open for longer than 12 weeks and 66 percent saying they plan on hiring candidates who do not have all of the skills they need and filling any gaps through training.
The US economy added 228,000 jobs in the month of November, outperforming economists’ expectations, while the unemployment rate remained at 4.1 percent, its lowest since 2000, according to the latest figures from the Department of Labor. Average earnings rose by five cents an hour, resulting in a total increase of 64 cents, or 2.5 percent, in the past year.
The jobs report reflects the continued strength of the American economy, with wage growth finally starting to pick up after a years-long period of stagnation despite of a historically tight labor market. It also shows that the mainland US has rebounded strongly from the major hurricanes that did extensive damage to Florida and Texas in September. The small job loss reported that month was later upward to a small gain, meaning the US has added jobs for 86 consecutive months. The monthly figures do not cover the territories of Puerto Rico and the US Virgin Islands, however, which were devastated by Hurricane Maria and are still struggling to rebuild.
The problem remains that the tightness of the labor market isn’t translating into real earnings growth for US workers, as most economic models predict it should. With talent in short supply, employers are under pressure to raise wages, the New York Times reports, and the slower-than-expected wage growth over the past year may reflect businesses being unable to afford the wages candidates are demanding:
Most economists expect wage growth to pick up as the unemployment rate falls. Other measures of earnings have already shown modestly faster gains, and there are signs that businesses are feeling pressure to raise pay. For the first time in six years, chief executives surveyed by the Business Roundtable, a coalition of big corporations, reported that labor expenses were their biggest cost pressure in the fourth quarter.
The US labor market continues to grow, but hiring slowed slightly in August, with employers adding 156,000 new jobs and the unemployment rate increasing slightly from 4.3 to 4.4 percent, according to the Labor Department’s monthly jobs report. The Associated Press examines the numbers:
Job growth in June and July was revised down by a combined 41,000, leaving an average monthly gain this year of a solid 176,000. Taken as a whole, Friday’s jobs report pointed to an economy that is still steadily generating jobs, though at a slower pace than it did earlier in the recovery from the recession. With fewer people looking for work, fewer jobs are being filled.
One persistent soft spot in the job market is that pay raises remain tepid. Average hourly pay rose just 2.5 percent over the 12 months that ended in August. Wage growth typically averages 3.5 percent to 4 percent annually when unemployment is this low. … Overall, hiring this year has averaged 176,000 a month, roughly in line with 2016’s average of 187,000. August was the 83rd straight month of job gains.
The report does not account for the economic impact of Hurricane Harvey, which came too late in the month to be reflected in the Labor Department’s surveys. Economists tell the AP the effects of the disaster will likely be visible in the months to come, with job growth first weakening and then rebounding as workers who were temporarily laid off are rehired.
Overall, August’s job numbers undershot economists’ expectations, CNBC’s Jeff Cox reports, but not enough to cause concern:
US nonfarm payrolls increased by just 138,000 last month and job creation numbers from March and April were revised downward by 66,000, but the unemployment rate fell to a 16-year low of 4.3 percent, according to the latest statistics from the Labor Department. Reuters has the details:
May’s job gains marked a sharp deceleration from the 181,000 monthly average over the past 12 months. Job growth is slowing as the labor market nears full employment. Last month’s job gains could still be sufficient for the Federal Reserve to raise interest rates this month. … The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.
The unemployment rate fell one-tenth of a percentage point to its lowest level since May 2001. It has dropped five-tenths of a percentage point this year. Last month’s decline came as people left the labor force. The survey of households from which the jobless rate is derived also showed a drop in employment.
The new jobs report comes less than two weeks before the Federal Reserve’s next policy meeting, when they will decide whether to raise the central bank’s benchmark interest rate. Observers say the Fed is likely to remain on course to raise rates again, despite the dip in job creation. But there is some disagreement among economists over whether this report indicates that the economy is slowing down or merely reflects a bump in the road, according to CNN Money: