US Job Growth Slowed in February, but Average Earnings Rose

US Job Growth Slowed in February, but Average Earnings Rose

The US economy added only 20,000 jobs last month, according to the Labor Department’s latest jobs report, marking a sharp slowdown from a streak of monthly gains in the hundreds of thousands. The unemployment rate, however, fell from 4.0 to 3.8 percent, while the number of people employed part time for economic reasons decreased by 837,000 to 4.3 million, following a sharp increase in January attributed to the federal government shutdown that month. The return of furloughed federal employees also contributed to the decline in the overall unemployment rate.

The number of new jobs fell far short of economists’ predictions, which were in the range of 170,000-180,000. Employment in fields like professional services and health care continued to increase apace with recent trends, but the construction sector cut 31,000 jobs and manufacturing added only 4,000. Employment in other industries like retail, leisure, and hospitality stagnated.

The contrast with other recent months is even more striking as the numbers of new jobs created in December and January were both revised upward slightly, to 227,000 and 311,000 respectively. This sudden swing from robust to lackluster job growth is difficult to interpret as it may signal a slowdown be just a blip in the data, the New York Times notes:

January’s payroll gains were exhilarating. February’s numbers were disappointing. Together they offer a potent reminder that each monthly employment report from the Labor Department captures just a moment in time. Longer-term trends are what matter, and the streak of job growth continues to set records. …

Still, as Carl Tannenbaum, chief economist of Northern Trust in Chicago, said: “This is a disappointing report. I don’t think there’s any way to sugarcoat it.” Rising wage growth is good for workers, but combined with soft payroll growth, he said, “it’s a signal we need to be cautious with the U.S. economic outlook.”

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US Job Market Finishes 2018 Strong, but Talent Challenges Remain

US Job Market Finishes 2018 Strong, but Talent Challenges Remain

The US jobs numbers for December, released by the Bureau of Labor Statistics on Friday, exceeded expectations by a wide margin with the economy adding 312,000 jobs last month, while figures from October and November were revised upward by a combined total of 58,000. It was the best month of job growth since February 2018, when 324,000 jobs were created. Economists surveyed by Dow Jones had forecast just around 176,000 new jobs, according to CNBC.

The unemployment rate increased slightly from 3.7 to 3.9 percent in December, but for a good reason: not because workers lost their jobs, but rather because 419,000 new job seekers entered the labor force. The unemployment rate has fallen from 4.1 percent since December 2017, while the workforce expanded by nearly 2.6 million people. With the final report for the year, the US added an average of 220,000 jobs a month in 2018. Wages also grew in December by 0.4 percent over the previous month and 3.2 percent over the previous year, tying with October for the best year-over-year increase since April 2009 and indicating that the tight labor market is finally leading to higher pay for US employees.

“It appears that higher wages are the reason why people are returning to the active labor force in large numbers,” Paul Ashworth, chief US Economist with Capital Economics, commented to CNN, adding that wage growth might spook investors by suggesting that the Federal Reserve would proceed with its planned schedule of interest rate hikes this year. Ashworth added in a note reported by CNBC that the big jump in jobs “would seem to make a mockery of market fears of an impending recession,” while Jim Baird, chief investment officer for Plante Moran Financial Advisors, told the network: “Employers, it would seem, didn’t get the memo from Mr. Market that it’s time to tighten their belts.”

Nonetheless, the robust jobs report comes amid market jitters over the possibility of an overheated economy, missed earnings projections from some major US companies, and concerns about the domestic impact of President Donald Trump’s trade policies toward China. In remarks after the report was released on Friday, Fed Chairman Jerome Powell said the central bank was prepared to adjust monetary policy in response to changing economic conditions, meaning it could ease up on raising interest rates if the economy shows signs of trouble. Powell described the jobs report as encouraging, saying the rise in wages “does not raise concerns about too-high inflation” and would not prompt the Fed to accelerate rate increases, the New York Times reported.

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Wages Rise and Job Gains Continue in Strong August Report

Wages Rise and Job Gains Continue in Strong August Report

Unemployment held steady at 3.9 percent last month, while the US economy added 201,000 jobs, according to the August jobs report from the US Bureau of Labor statistics, released on Friday. The numbers of new jobs created in the previous two months were revised downward, however, by 248,000 to 208,000 for June and from 157,000 to 147,000 fro July—a total downward revision of 50,000.

Average hourly earnings rose by 10 cents to $27.16 in August, for a year-over-year gain of 77 cents or 2.9 percent. These numbers indicate that wage growth in the US may finally be accelerating again after years of stagnation despite a tight labor market, the New York Times reported:

Amy Glaser, a senior vice president at the staffing company Adecco, said she had noticed a significant change in employers’ willingness to increase hourly wages. “Now clients are talking in terms of dollars instead of cents for wage increases,” she said. During the busy holiday season, employees often jump from one business to another for an additional 50 cents an hour, Ms. Glaser said. Companies are trying to head off that exodus, she said, by starting seasonal hiring earlier — in August, instead of September and October — and by offering higher starting pay.

One sour note in Friday’s report, however, was that both the labor force participation rate and the employment-population ratio declined by 0.2 percentage points, to 62.7 percent and 60.3 percent, respectively. These figures suggest “an economy running awfully close to its capacity,” Neil Irwin observes at the Times’ Upshot blog:

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Unemployment Fell and Earnings Rose as US Added 157,000 Jobs in July

Unemployment Fell and Earnings Rose as US Added 157,000 Jobs in July

The US economy added 157,000 jobs last month, while the unemployment rate ticked down to 3.9 percent, Friday’s jobs report from the Bureau of Labor Statistics revealed. The labor force participation rate remained unchanged over both the month and the year, at 62.9 percent. The number of workers re-entering the job market decreased by 287,000 in July to 1.8 million, after having increased in June, causing the unemployment rate to increase that month from 3.8 to 4.0 percent.

The manufacturing sector added 37,000 jobs in July, mostly in durable goods. Economists have been bracing for an impact on this sector caused by President Donald Trump’s recent changes to US trade policies, but these effects have not yet appeared in the BLS data. Other sectors with notable job growth last month included professional and business services (51,000 new jobs), health care and social assistance (34,000), food services and drinking places (26,000), and construction (19,000). The retail sector gained 7,000 jobs, with 32,000 job losses in sporting goods, hobby, book, and music stores offsetting gains in other types of retail establishments.

Those lost retail jobs may be the reason why the report failed to meet economists’ expectations of 190,000 new jobs, CNBC’s Patti Domm points out, possibly due to the bankruptcy of one major retailer:

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US Economy Added 213,000 Jobs in June As Labor Force Expanded

US Economy Added 213,000 Jobs in June As Labor Force Expanded

The latest jobs numbers from the US Labor Department’s Bureau of Labor Statistics paint an encouraging picture of the state of the labor market, with new jobs being created at a steady clip and more people joining the workforce than leaving it. Total nonfarm employment increased by 213,000 last month, while the civilian labor force grew by 601,000, edging labor force participation up to 62.9 percent.

Unemployment increased from 3.8 to 4.0 percent as the number of unemployed persons increased by 499,000 to 6.6 million, but these changes reflected the large numbers of new job seekers, not people being thrown out of work. The bureau also revised its estimates for job growth upward for the previous two months, from 233,000 to 244,000 new jobs in May and from 159,000 to 175,000 in April.

Wage growth remains lower than in previous expansionary periods, with June’s earnings numbers showing a year-over-year increase of just 2.7 percent. Average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.98 last month. Coming after a long period of wage stagnation, these numbers are better than nothing for American workers, but still below economists’ expectations and barely enough to keep pace with inflation.

“Taken at face value,” Neil Irwin interprets at the New York Times, “it’s a sign that the hot job market is succeeding at pulling people off the sidelines and into the work force”:

It’s easy to imagine people who have become disengaged from the work force who, in this tightening job market, are more likely than they were a few years ago to see help wanted signs everywhere, or to have friends and acquaintances urge them to start working.

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Unemployment, Benefit Claims Declining Among Americans with Disabilities

Unemployment, Benefit Claims Declining Among Americans with Disabilities

Newly released data from the US Bureau of Labor Statistics show that the unemployment rate for people with disabilities declined last year to 9.2 percent, from 10.5 percent in 2016. While still considerably higher than the overall unemployment rate, which stood at 4.2 percent in 2017 and fell to an 18-year monthly low of 3.8 percent in May, the BLS figures indicate that people with disabilities are also experiencing the benefits of today’s tight labor market. “The decline reflects the trend in the overall labor force, which has been recovering since the end of the Great Recession,” BLS economist Janie-Lynn Kang tells Kathy Gurchiek at SHRM.

Overall, 18.7 percent of people with disabilities in the US were employed in 2017, the BLS data shows—up from 17.9 percent in 2016. Employed people with disabilities were more likely to be self-employed than those with no disability, the agency said, and were also more likely to work part-time (32 percent, compared with 17 percent for those with no disability). Overall, however, eight in ten US adults with disabilities are not in the labor force at all, while only 3 percent of these individuals said they wanted a job.

Concomitant with job growth among this segment of the population, the number of Americans seeking Social Security Disability Insurance benefits has been falling sharply, the New York Times reported last week:

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US Unemployment Rate Fell to 18-Year Low in May

US Unemployment Rate Fell to 18-Year Low in May

The US economy added 223,000 jobs last month and the unemployment rate fell to a post-recession low of 3.8 percent, the latest jobs report from the Bureau of Labor Statistics showed on Friday. May continued the US labor market’s growth streak into its 92nd month, the longest such expansion in history. New jobs numbers were also revised upward by a total of 15,000 for the preceding two months, to 159,000 jobs in April and 155,000 in March. Retail, health care, and construction were the leading sectors adding jobs last month.

Compared to the previous year, the unemployment rate was half a percentage point lower in May, with the total number of unemployed persons reduced by 772,000. The number of long-term unemployed was little changed from April to May, standing at 1.2 million, but this figure had also declined by 476,000 over the past year. Underemployment remains an issue, with 4.9 million US workers working part-time who would prefer to be working full-time.

In the first five months of 2018, the workforce has grown by an average of 207,000 jobs per month, the Wall Street Journal adds, beating the average monthly growth of 182,000 in 2017. May’s numbers exceeded the expectations of economists surveyed by the Journal, who had expected 190,000 new jobs and a 3.9 percent unemployment rate. The last time the US recorded a 3.8 percent rate was in April 2000, and the last time before that was in 1969. The falling rate reflects a mix of positive and negative developments, however, as the labor force participation rate ticked down from 62.8 to 62.7 percent and the number of people not in the labor force increased by about 170,000.

Wage growth remains real the sticking point in the US labor market. Average hourly earnings in the private sector rose by 8 cents last month, to $26.92, for a year-over year increase of 71 cents or 2.7 percent. This increase represents a slight improvement over the persistent stagnation in wages in the years following the recession, but annual wage growth has not cracked the 3 percent mark since 2009.

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