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BLS Report - February 2019
Employment Summary for February 2019
The past year of economic growth in the U.S. undoubtedly galvanized expectations among the country's political and business leaders regarding what the early months of 2019 would bring. Although January brought a massive infusion of new jobs among multiple sectors of the American economy - 311,000 positions, according to the Bureau of Labor Statistics - several early indicators of February's economic growth seem to suggest that such voluminous growth, like what the country saw over the course of the last 12 months, simply may not be sustainable.
According to the latest edition of the BLS Employment Situation Summary, nonfarm payroll organizations in the U.S. added only 20,000 jobs in February 2019, a level of growth characterized by the BLS's own press release as statistically insignificant. Also, the unemployment rate fell back to 3.8 percent after jumping from that level to an even 4 percent in January, an occurrence attributed to an uptick in Americans actively looking for work. Other major indicators cited in the report were more positive, particularly wage growth, which experienced a higher-than-expected jump to 3.4 percent on a year-over-year basis.
Bloomberg, which conducted its usual survey of prominent economists prior to the BLS data's release, reported that these experts had predicted a solid expansion figure of 180,000 new jobs for the month, which exemplifies how unexpected February's actual jobs number was.
The industries that saw the biggest surges in their labor forces during February should be no surprise to those who have kept track of the American employment numbers over the past few years: Professional and business services added 42,000 jobs, while healthcare organizations brought on 21,000 new workers. Both of these sectors have more often than not been well ahead of the pack, by comparison to their contemporaries, from 2017 to January 2019. Wholesale trade also saw a solid bump with 11,000 jobs added to payrolls of firms throughout the industry. Manufacturing gained 4,000 jobs - not a gain to dismiss but possibly disappointing to company leaders by comparison to previous months.
Construction took a considerable bite out of overall U.S. labor-force growth during February, due to its loss of 31,000 jobs. The BLS report attributed this loss in large part to a plunge in the specialized field of heavy and civil engineering construction, but the sector saw declines in all of its segments. Given the giant leap forward construction experienced in January (53,000 new jobs), the scope of the latest month's drop-off remains surprising even if colder weather in much of the country, rather than poor conditions for the industry, undoubtedly caused some of it.
While the slowdown of job growth may not be reason for American government officials, company leaders and employees to worry about its implications for the future of the economy, the combined force of this indicator and other recent trends in U.S. macroeconomic variables represents enough for all of those individuals to keep a close eye on things moving forward. According to The Washington Post, the Department of Commerce revealed 2018's trade sales figure March 6: an $891.2 billion deficit, larger than any ever before seen in the U.S. This constitutes a major setback for President Donald Trump, who often promised in his successful campaign that import tariffs and a strong commitment to American industries would strengthen the economy and cut down on the trade deficit.
William Reinsch, a former Commerce Department official now working with the Center for Strategic and International Studies think tank, described the issue succinctly in an interview with the Post: "Macroeconomics end up ruling," he told the news provider. "You can't wish it away. You can't tariff it away."
Much of the immediate American economic future may be decided if and when Trump finalizes a pending deal with President Xi Jinping of China, which the Post reported may happen very soon. The Chinese chief executive enacted attritional tariffs in response to Trump's policies, making both leaders responsible for numerous direct and indirect disruptions to global trade. The potential deal would have China buy back $1.2 trillion in American products over the next six years, reduce the burden of tariffs on both sides and institute various regulations to protect each country's trademarked goods.
According to CNBC, inflation-related data is being monitored closely by Federal Reserve policymakers, particularly with regards to wages. Decisions regarding future interest rate hikes will be pushed out as officials from the Central bank continue to watch the data.
BLS Report - January 2019
Employment Summary for January 2019
The first month of 2019 picked up where 2018 left off in terms of job growth in the U.S., with the number of nonfarm payroll jobs added by American businesses surpassing the strong figure seen last December: Per data from the Bureau of Labor Statistics' latest Employment Situation Summary, U.S. organizations brought on 304,000 new workers in January. CNBC reported that a Dow Jones survey of economic experts initially expected about 170,000 jobs added.
While this is slightly below the total of 312,000 originally reported for December 2018, the newest report revised that month's gains down to 222,000 and brought November's comparatively modest figure of 170,000 up to 190,000. Although the unemployment rate rose marginally between December and January - from 3.9 to 4 percent - this was attributed to a surge in the number of Americans actively looking for work, rather than any troublesome trend.
Additionally, the partial shutdown of the U.S. federal government turned out to not affect overall employment to any statistically significant degree - beyond an 11 percent jump in the number of underemployed persons (those working part-time out of economic necessity). With that said, it's worth noting that the BLS considered those who worked without pay or had been furloughed during the shutdown to have been fully employed, because their last paycheck came January 12, 2019, which was within the survey week for the report. As such, any full accounting of the shutdown's economic effects (or lack thereof) on the economy remains unknown, and there is still the potential for another shutdown in a few weeks, considering that the bill to reopen the government only included appropriations lasting until February 15.
The leisure and hospitality industry led all other U.S. employment sectors in jobs added during January by a significant margin. Its massive gain of 74,000 positions was fueled not only by food and drink services but also by new opportunities in amusements, gambling and recreation. Construction came in second place with 52,000 new jobs created across all of its employment subcategories, and healthcare was not too far behind with an addition of 42,000 positions.
Several other sectors also experienced notable surges in job creation, such as the dependably strong professional and business services industry, which added 30,000 new positions to its payrolls across the U.S.
Transportation and warehousing increased almost as much with the creation of 27,000 new roles. Rounding out sectors with noteworthy professional additions were retail trade, manufacturing and mining, which brought on 21,000, 13,000 and 7,000 new workers, respectively. No other industries saw their labor forces rise or fall by any empirically significant level.
There were a few less positive indicators found within the latest BLS report. Wage growth, for example, was somewhat slower than expected, with a 3 cent increase in the average American hourly wage representing growth of just 0.1 percent - under the 0.3 percent predicted by various economists. On a year-over-year basis, earnings have grown 3.2 percent between January 2018 and 2019.
Some business leaders may also find themselves perturbed by the sudden switch to a cautious stance by the Federal Reserve, characterized by Fed Chair Jerome Powell's January 31 statement that the central bank would not raise its key interest rate to start the year. According to NPR, Powell cited factors including the impending upheaval of Brexit and various trade disputes around the globe - including the arguments between the U.S. and China - as motivations for the Fed's decision. Regardless of the Fed’s position, the economic picture for the U.S. at the start of the new year is undoubtedly positive.
BLS Report - December 2018
Employment Summary for December 2018
U.S. job growth experienced an unprecedented uptick in December, with employers adding approximately 312,000 nonfarm positions throughout the month, according to the Bureau of Labor Statistics’ most recent Employment Situation Summary. Market analysts anticipated a spike of sorts following the underwhelming employment figures recorded in November, during which time American businesses added just 176,000 roles, per revised numbers from the BLS. However, most anticipated an increase of around 180,000 jobs, The New York Times reported.
The BLS attributed the startling job growth observed in December to strong gains in the food and beverage, construction, healthcare, manufacturing and retail industries.
Healthcare boasted the biggest hiring increase, with organizations in the sector adding 50,000 jobs. This capped off a banner recruitment year in the healthcare industry, which managed to add 346,000 positions in 2018, a significant increase over the 284,000 roles it added in 2017. Businesses in the food and beverage arena added 41,000 roles in December, pushing its annual total to 235,000. The construction sector managed to tack on 38,000 jobs in the month, vaulting its annual figure to 280,000, a slight improvement on the 250,000 new roles that materialized in 2017. The manufacturing space added 32,000 positions in December, as firms specializing in durable goods, metal fabrication and electronics niches flourished. This pushed yearly hiring figures to 284,000, a far cry from the 207,000 new jobs added in 2017. Retailers added 24,000 jobs during the month of December, with merchandisers and car dealers doing the bulk of the recruitment. The retail industry established 92,000 new roles in 2018.
Employment in the expansive professional and business services sector also increased over the month. Here, employers added 41,000 jobs, bringing the annual count to 583,000, an improvement over the 458,000 new positions created in 2017.
Job growth across a smattering of other industries, including the financial services, logistics, mining and warehousing spaces, was flat for December.
While the hiring situation improved over the final month of 2018, unemployment rose, moving from 3.7 percent to 3.9 percent. The BLS linked this jump to increased rates of joblessness among adult men and African Americans. The population of job leavers ballooned in December, as an estimated 142,000 Americans handed in their two weeks over the month, adding further fuel to the fire. Unemployment rates for adult women, teenagers, individuals of Asian descent and Caucasians remained stable. In all, the U.S. unemployment rate fell from 4.1 percent to 3.9 percent in 2018, continuing more than a decade of workforce growth.
The labor participation rate and employment population ratio saw little change in December, hovering near 63 percent and 60 percent, respectively. Both metrics increased by 0.4 percent in 2018.
Despite these encouraging numbers, many investors remain skeptical of American economy due to recent marketplace turbulence, The Times reported. Additionally, the Federal Reserve appears to be taking its time contemplating a next interest rate hike after four were seen in 2018. According to USA Today, Federal Reserve Chairman Jerome Powell said the central bank “will be patient” as it weighs future interest rate hikes in light of low inflation, adding that policymakers will also take into account recent stock market volatility.
However, economists and labor market analysts are not so concerned heading into the new year, as the U.S. employment situation continues to improve.
BLS Report - November 2018
Employment Summary for November 2018
The spirited pace of job growth that the U.S. reached in October turned out to be unsustainable for November: In its latest edition of the Employment Situation Summary, the Bureau of Labor Statistics confirmed a total of 155,000 nonfarm payroll jobs created for the month, a decline of almost 100,000 from October's numbers. NPR pointed out that November's figure was considerably below the 190,000 new jobs economists had projected during the month. Alongside some other signs of uncertainty - major stock-market fluctuations during the week of Dec. 3 and projections from regional Federal Reserve offices that were all over the map in terms of outlook - the newest BLS statistics could spark some concern about a broader slowdown in the American economy.
At the same time, other November metrics were more indicative of a chance for stability: The unemployment rate held static at 3.7 percent for the third consecutive month, year-over-year growth in average hourly earnings remained at October's respectable level of 3.1 percent and the labor force participation rate stood at 62.9 percent.
Healthcare and professional services tied for first place in terms of November's biggest employment producers, each creating 32,000 new jobs. Given the way 2018 has turned out for both of these sectors, such growth can be considered par for the course. Manufacturing came in close behind those two fields, with a total of 27,000 new roles added to its practitioners' payrolls, and transportation and warehousing created a more than respectable 25,000 jobs for the month.
The retail sector, meanwhile, was somewhat of a mixed bag: Although general merchandise stores and the BLS's catch-all segment of "miscellaneous store retailers" saw big gains of 39,000 and 10,000 positions, respectively, business owners in a variety of more specific retail fields experienced five-figure job losses. Clothing and accessories shops in the U.S. had to drop 14,000 employees in November 2018, while electronics and appliance stores lost 11,000 jobs, as did sporting goods, hobby and book stores.
With the year's end just around the corner, economists, company leaders and government officials are naturally starting to look at 2018 as a whole. Considering how so much of the year turned out, measurements like average monthly job growth will probably beat some of the strongest levels seen since 2016. Bankrate senior economic analyst Mark Hamrick commented on this in an interview with The Washington Post.
“Most measures of the U.S. economy have been holding up quite nicely,” Hamrick said, according to the news provider. “The question is: How much slowing is there on the horizon?”
There is no clear answer in sight for Hamrick's question, due to several indicators of waning economic stability on both macro and micro scales: The Fed, which will convene Dec. 18-19 to formally decide on issuing an increase in benchmark interest rates, confirmed in its Dec. 5 Beige Book report that several districts saw tightening labor markets and shortages of skilled workers for specialized trades. (This will likely have little effect on whether the Fed hikes rates, though, which it is widely expected to do.)
While trade tensions have been a concern of economies around the world for at least the past half-year, November and early December 2018 showed more concrete signs of tariff-related impact on American businesses than previous months. According to NPR, Dec. 4 marked a 799-point drop in the Dow Jones Industrial Average, while Dec. 6 showed a 750-point plunge for most of the day's trading before bouncing back to end on just a 79-point deficit. Drops that close together - both attributed to disputes between China and the U.S. - always rattle stock-market confidence and may not be cause for any sustained alarm, but other indicators could be more substantive, as noted by Lindsey Piegza, chief economist at Stifel, a global financial services firm.
“Trade tensions are starting to eat at business confidence,” Piegza said to the Post when asked about the trade conflicts. “We’ve seen a pullback in terms of investment. Businesses are starting to question whether they do want to take on that additional hire.”
Business owners in the U.S. still have plenty of reason to feel generally optimistic about the economy's direction, as 2018's progression thus far shows. That said, it will likely still be prudent to make contingency plans for the possibility of more concrete job-growth sluggishness in 2019, just to be on the safe side.
BLS Report - October 2018
Job growth in October 2018 surpassed September's numbers and economists' projections for the month. In its Employment Situation Summary, the Bureau of Labor Statistics reported Nov. 2 that nonfarm payroll employment rose by 250,000 in October. This is significantly higher than Wall Street analysts' prediction of 195,000, as reported by The New York Times. Michelle Girard, chief U.S. economist at NatWest Markets told The Times, "The underlying fundamentals of the labor market are still really bright, it's really the strongest part of the broader economy at the moment." October 2018 represented the 97th consecutive month of job growth in the U.S.
Hurricane Michael, which caused destruction in the northwestern region of Florida, had no recognizable impact on the national employment rates for October. However, jobless claims in Florida and Georgia rose by 10,000 following this storm's landfall.
The unemployment rate did not change from September's 3.7 percent. This number represents the lowest figure since December 1969. This amount, as well as the impressive job growth of the month, may influence American voters going into the upcoming midterm elections.
The largest job growth statistic comes from an industry that suffered in September: leisure and hospitality. The sector rose by 42,000 jobs. This is a dramatic rise in comparison to September's numbers, which were likely impacted by Hurricane Florence. Healthcare took second place in October, with the addition of 36,000 positions. This job growth occurred in a variety of settings, with 14,000 job gains in ambulatory health services, 13,000 in hospitals and 8,000 in nursing and residential care facilities. The professional and business services industry forfeited its previously first place standing when it gained 35,000 in October, a distinguishable drop from its job growth of 54,000 in September. With the fourth largest job growth in October, the manufacturing industry added 32,000 jobs, 10,000 of which occurred in the durable goods sector.
Employment in construction experienced an increase of 30,000 in October, a significant change from its rise of 23,000 in September. Transportation and warehousing displayed a slight expansion in October, with the creation of 25,000 jobs. Meanwhile, the mining industry remained stagnant, with an increase of 5,000 new jobs. Other industries, such as retail trade, wholesale retail, financial activities, government and information did not change significantly in October.
Average hourly earnings of all employees on private payrolls increased by 5 cents, or 0.2 percent, in October, rising to $27.30. This is indicative of a 3.1 percent increase over the past 12 months. It seems to be on-pace with the Consumer Price Index for All Urban Consumers, which increased by 2.3 percent from September 2017 to September 2018. The creation of jobs and all-time-low unemployment rate are impressive during this month. Business leaders, job seekers and economists in the U.S. should be pleased with the current state of employment.
As a result of the continually growing economy, interest rates from the Federal Reserve are likely to keep rising. A CNBC report stated, "Powell [Fed chairman] says we're 'a long way' from neutral on interest rates, indicating more hikes are coming." The CME Group provided a 75 percent probability of a rate hike by the end of 2018, likely in December.
BLS Report - September 2018
Employment Summary for September 2018
Job creation in September 2018, in terms of raw numbers, did not reach the heights of August or some of the year's other most robust periods. The Bureau of Labor Statistics announced that nonfarm payroll businesses in the U.S. brought on 134,000 new workers during the month in its latest edition of the Employment Situation Summary, considerably less than August's 210,000 jobs. Also, the number failed to meet economists' expectations: Bloomberg's survey of economic experts had projected 185,000 new positions created, while The New York Times reported that Wall Street's general estimate was more conservative (168,000) but still greater than the final result.
However, a number of seasonal and situational factors that do not reflect the broader direction of the American economy are the most direct causes of slowed job growth, not least of which is the impact that Hurricane Florence had on several states along the eastern seaboard. Additionally, the BLS noted that the survey periods during which the agency collected its data on employment and unemployment directly coincided with the storm's landfall, which may have adversely affected initial results. Figure adjustments to account for such anomalies, which routinely occur after the initial release of the Employment Situation, may thus reveal more positive numbers.
Meanwhile, the employment rate fell in September to reach a new low for the year: 3.7 percent. As noted by the Times, this figure isn't merely a landmark for 2018, but also the lowest jobless percentage on record since 1969. Speaking with Bloomberg, Alan Krueger, former leader of the White House Council of Economic Advisers to President Barack Obama and a noted economics professor at Harvard University, said mitigating factors impacting the numbers should not detract from an ultimately positive conclusion.
"The markets could give this a little bit of a pass because it's not clear what impact the hurricane had at the moment," Krueger told the news provider. "I would view this as a full-employment jobs report."
The industries responsible for the latest round of job growth should come as no surprise, based on trends within the U.S. economy over the past 12 to 18 months: Professional and business services was well ahead of all other fields for the third month in a row, adding 54,000 positions in September and beating its own gains from the month before by 1,000. Healthcare took second place yet again, albeit with 26,000 new jobs - less than half the growth seen in the No. 1 sector.
Meanwhile, transportation and warehousing surged ahead after several months of no statistically significant activity to create 24,000 positions, and construction was right on its heels with 23,000 new jobs. Manufacturing and mining also added staff to their payrolls in September - 18,000 and 6,000, respectively, with the latter mostly dependent on support-services positions for its job growth. No other sector saw any meaningful increases. In terms of losses, a drop of 17,000 workers in leisure and hospitality stood out as the only notable labor decline, and can be attributed at least in part to Hurricane Florence and the transition from summer to autumn that often produces staff cuts.
Average hourly pay increased by 8 cents, or 0.3 percent, from the previous month, per the BLS's figures. This represents a 2.8 percent year-over-year increase, which is still less than what one might expect given the breakneck pace of job growth during that time. Nevertheless, economists and business leaders can find much to be pleased with in the overall picture that this data paints, including reinforcement of hopes that the Federal Reserve will raise interest rates one more time before the end of 2018.
BLS Report - August 2018
Employment Summary for August 2018
August was a strong month for employers across most segments of the U.S. economy, particularly in the wake of a July performance that notably underperformed the expectations of economic analysts, businesses and governments alike. According to the latest Employment Situation Summary from the Bureau of Labor Statistics, American nonfarm organizations in both the private and public sectors added 210,000 jobs to their workforces.
This figure stands well above the 147,000 new positions created in July (downwardly revised from an initial estimate of 157,000) and also exceeds the median prediction by Bloomberg-surveyed economists, who expected to see 190,000 jobs added during the month. Meanwhile, the unemployment rate held fast to its July figure of 3.9 percent (about 6.2 million unemployed persons actively looking for work) in August, and this did slightly fall behind the estimate of economic experts Reuters polled, who predicted a drop to 3.8 percent.
Michael Gapen, chief U.S. economist at Barclays, pointed out in an interview with The New York Times that figures such as these indicated some of the fears over international trade wars were, for now at least, somewhat overblown.
"What's worth noting is that even though there still remains a lot of headline noise around politics and protectionism, underneath that, the U.S. economy - and that includes labor markets - is doing quite fine," Gapen told the newspaper.
Professional and business services remained the top performer in terms of employment creation among American industries, adding 53,000 jobs during August. Healthcare came in second, with 33,000 new roles added, while construction and wholesale trade were nearly tied with their respective gains of 23,000 and 22,000 jobs. (By contrast to its wholesale counterpart, retail trade, after a few months of back-and-forth, didn't see any major change in August).
There were some notable differences between the August and July reports in terms of industries showing statistically significant increases or declines. Transportation and warehousing, which has not risen or fallen much throughout 2018, saw a big jump of 22,000 new positions created in August. Mining also added jobs this past month after showing no significant movement in July, although these almost all came from mining support services, as has been the case for many of the previously reported increases within that particular field over the past year.
Some economists will see manufacturing's decline in employment - a loss of 3,000 positions in August - as the biggest surprise in the BLS's latest jobs report. Considering that the field added 37,000 jobs in July and 36,000 in June, as it has for nearly a year starting in 2017 and continuing through to 2018. Any drop counts as a notable negative change in light of a White House administration under President Donald Trump that repeatedly pledged to bring back manufacturing jobs - and also, with good reason, has cited economic gains as its biggest success. This could be attributable to a slight drop in the labor force participation rate, which fell 0.2 percent to reach 62.7 percent.
That said, a loss of 3,000 roles could easily be offset by even a relatively modest jobs gain for September.
The August BLS report also contained other significant positives. Wages grew by 0.4 percent when analyzed by average hourly earnings, rising 10 cents to reach $27.16. When looked at on a year-over-year basis, the gain is even more impressive - 2.9 percent between August 2017 and 2018.
Indications also exist of some trade tensions between the U.S. and other nations beginning to abate somewhat. CNN reported Aug. 28 that President Trump and outgoing Mexican President Enrique Peña Nieto agreed on several adjustments to the North American Free Trade Agreement, most of them meant to ensure both nations were able to maintain strong involvement in auto manufacturing. Peña Nieto expressed hope that Canada would accept the revisions, which would further advance NAFTA renegotiation efforts. However, according to another Reuters report, Canada and America still remain at odds over several industries, most notably dairy, lumber, media and steel.
BLS Report - July 2018
The job gains initially estimated by the U.S. Bureau of Labor Statistics for June were recalculated from 213,000 to 248,000. As such, some economists consider the total increase in nonfarm payroll employment for July - 157,000 jobs - an even more significant decline from June's numbers. Other analysts see it more as a regression to the mean: a more typical and sustainable pace of healthy job growth than the almost hyper-real gains that long stretches of 2017 and 2018 have seen.
That said, the July figure is considerably less than what some experts predicted: Economists surveyed by Bloomberg expected a mean increase of 193,000 jobs, while a similar questionnaire from Reuters came up with an average prediction of 190,000 new positions. The unemployment rate, by contrast, was widely expected to fall from June's 4.0 percent - which it did, to reach 3.9 percent in July. The labor force participation rate held steady at 62.9 percent.
Many of the industries that saw notable increases in positions added were the same between June and July: Professional and business services once again took the No. 1 spot, with 51,000 new positions created, while manufacturing took second place with 37,000 jobs added. Both of these sectors also saw a month-to-month uptick of exactly 1,000 jobs from June to July. Healthcare came in third again this July, but with stronger numbers than what was seen in June - 34,000 new roles created as opposed to 26,000 the month prior.
Food services and drinking places was a new addition to the list of statistically significant job gains, with 26,000 new workers added to its payrolls. Seasonal factors likely drove this, given the tendency of July and August to serve as primary vacation time. Construction and retail trade were the last two sectors to see any notable uptick in employment, with 19,000 and 7,000 jobs added, respectively.
No broad sector of the American economy experienced significant labor force decline, though retail's gain would've been much greater if not for a loss of 32,000 positions in sporting goods, hobby, book and music stores. Clothing, general merchandise and food and beverage stores offset that drop with healthy job growth.
Speaking with Reuters, Omair Sharif, senior U.S. economist at the New York branch of the multinational bank Societe Generale, expressed a sentiment common among various experts: slight disappointment, tempered by broader optimism.
"The story is pretty much the same," Sharif said to the news provider. "Job growth is still very strong. It's still a disappointment on wages still with the unemployment rate this low. We are still fluctuating between 2.5 percent and 2.8 percent in year-over-year wage growth. The labor story hasn't changed very much. Everything else looks pretty solid. We are just waiting for wages to accelerate. We can't seem to budge out of this range."
BLS figures show that wage growth increased from June to July, jumping from 5 to 7 cents in terms of additions to average hourly earnings - a 0.3 percent jump, as predicted by the economists Bloomberg surveyed. Measured year-over -year, it's not quite as positive, with a 2.7 percent increase between July 2017 and 2018, identical to June's year-on-year wage gain.
The Federal Reserve increased federal benchmark interest rates in July, as expected, with many predicting another rate hike in September. Sharif cautioned against assuming this was "a done deal," however, noting that the Fed will examine "more than just the labor market to determine further hikes."
In big-picture terms, the U.S. economy remains considerably solvent, but this could change somewhat if trade tensions with other nations - especially China - become more intense.
BLS Report - June 2018
The U.S. saw yet another considerable monthly surge in the size of its labor force in June 2018. According to the Employment Situation Summary from the Bureau of Labor Statistics, nonfarm payroll across all American industries added 213,000 jobs during the month.
This is slightly less than May's tally of 223,000 new positions, but a strong number exceeding the median figure projected by a Bloomberg survey of economic experts, who expected approximately 195,000 jobs added.
Although the unemployment rate rose from May to June - coming in at 4 percent after May's remarkably low figure of 3.8 percent - many are attributing this to growth in the labor force participation rate, which most recently jumped 0.2 percent to reach 62.9 percent. This indicates an uptick in jobless individuals actively seeking work, particularly among prime-age workers (Americans between the ages of 25 and 54). Brookings Institution senior fellow Gary Burtless confirmed as much in an interview with The Washington Post.
"This trend has been well underway," Burtless told the news provider. "We had a very, very long recovery from an extremely deep recession. It wasnt spectacularly fast, but it has been spectacularly long."
The field of professional and business services stood well above other sectors of the U.S. economy in terms of increased employment for the month, adding a total of 50,000 jobs. Manufacturing saw the second largest gains, creating 36,000 new positions once again on the back of durable goods manufacturing. This smaller category of the field has reaped major overall benefits for the American manufacturing industry, in terms of both revenue and employment.
Healthcare - another consistent performer on the U.S. job market and general economy over the past few years - added 25,000 new positions to its labor force in June. Meanwhile, construction rounded out the group of sectors with five-figure job gains due to the 13,000 new roles it created, and mining was the only other industry with statistically significant employment growth for the month, adding 5,000 jobs altogether.
The only notable drop in total jobs for June occurred within the sector of retail trade - a loss of 22,000 positions. However, because this field of the American labor force added 25,000 jobs during May, any impact on the businesses within it would be minimal. Additionally, seasonal labor shifts, which are common in retail, are almost undoubtedly responsible for some of June's job losses. This reduces the likelihood that the drop-off is the beginning of any alarming trend - though it's too early to know all of the exact causes.
Speaking with Bloomberg, Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., offered a largely positive but nuanced take on the newest numbers from the BLS.
"This is a good job-creation number, but on the other hand we see still continued soft wage growth," Feroli said. "It's positive in the sense that we still have some capacity to grow above trend without triggering too much inflation worry." He added that the Federal Reserve could interpret these indicators as reasons to maintain its current schedule of increases to federal benchmark interest rates, rather than expanding to four rate hikes for 2018 as many economists have anticipated.
Growth in average hourly earnings did slow somewhat during June, with the month's 5 cent increase representing a 0.2 percent decline from May's wage gains. Also, concerns persist among some American businesses regarding potential adverse effects of the recent U.S. tariffs on numerous imports, including $34 billion in new levies placed on goods from China as of July 6, 2018. Yet the full effect of those measures remains to be seen, and in the meantime, the American economy is in a positive place, as it has generally been for the past several years.
BLS Report - May 2018
Employment Summary for May 2018
Considerable spikes in employment characterized the U.S. economy in May - more than enough to offset an April jobs report viewed as underwhelming in numerous respects. According to the latest Employment Situation Summary from the Bureau of Labor Statistics, nonfarm payroll employment in America rose by 223,000 through May. This was nearly 100,000 more than the 159,000 positions created during April (according to revised figures) and ahead of numerous economic analysts surveyed by both Bloomberg and Reuters, who predicted median gains of 190,000 and 188,000 jobs, respectively.
Additionally, the unemployment rate fell to 3.8 percent from the previous month, which, at 3.9 percent in April, was the lowest rate seen in almost 20 years. May's figure represents an almost half-century low.
Retail trade, the dependably robust field of healthcare and construction led the way for job increases, respectively gaining 31,000, 29,000 and 25,000 jobs in May.
Professional and technical services added 23,000 positions for the month, transportation and warehousing created 19,000 jobs and manufacturing continued its trend of expansion driven by durable goods production, with 18,000 roles added to its ranks. Mining brought up the rear in terms of statistically significant employment gains for May, creating 6,000 new positions largely in the niche of support services.
Job growth in other industries such as wholesale trade, information, financial activities, leisure and hospitality, and government was relatively unchanged.
Other indicators within the May BLS report, such as wage growth, provided stronger evidence of sustainable expansion than what were seen in April. Average hourly earnings increased 8 cents to reach $26.92, representing a 0.3 percent uptick that outshone April's 0.1 percent jump. Additionally, while April's decline in the labor force participation rate - to 62.7 percent from 62.8 - made it clear that some of 2018's earlier unemployment decline came from people who stopped actively looking for work, May had no movement in this metric, indicating that the U.S. gained at least enough positions for labor force participation to break even.
Michael Feroli, the chief U.S. economist at JPMorgan Chase & Co., provided a balanced examination of the employment report's conclusions in an interview with Bloomberg.
In its direct statements, the Fed remains noncommittal thus far regarding the specific schedule of federal benchmark interest rate hikes, but Feroli's opinion echoes the belief of many on Wall Street and the broader American financial sector who expect three more increases by 2018's end. Current inflation stands just below 2 percent, the desired level for the national bank, according to Reuters.
The White House's controversial imposition of metals tariffs on previously exempt trade partners including Canada, Mexico and the European Union, as well as other global socioeconomic unrest, could be problematic in the near future for the U.S. Yet at present, American domestic labor occupies an undeniably strong position based on the latest numbers.
BLS Report - April 2018
Nonfarm payrolls in the U.S. added 164,000 jobs in April 2018, according to the latest release of the Employment Situation Summary from the Bureau of Labor Statistics. While below expectations of just over 192,000 new jobs, this expansion of the labor force exceeded the previous month's figures, even when accounting for upward revisions bringing the March total to 135,000 new positions as opposed to the original 103,000.
Additionally, the unemployment rate slid to 3.9 percent during April. Reuters reported that this new percentage represents the lowest unemployment figure seen since December 2000.
When unemployment fell to 4.1 percent more than six months ago, that contraction itself represented a near-record low and provided strong evidence of how robust the American job market has been in the last few years. The metric's stability at this level for nearly half a year was arguably even more remarkable. As such, April's added drop in the joblessness rate could back up some economists' predictions that the second quarter of 2018 will feature better performance across multiple economic metrics than what was seen in the year's first quarter.
Professional and business services led the pack in terms of job growth-producing industries, with 54,000 jobs added in April. No other sector even came close to this level of employment gains.
In the runner-up spot, manufacturing saw the creation of 24,000 roles, stemming in no small part from the continued strength of the durable goods production market. Healthcare, which has been the American economy's brightest star almost without interruption for the past two years, also added 24,000 jobs. The mining industry rounded out April 2018's contingent of fields with noteworthy job growth, with the creation of 8,000 positions. No other fields experienced any statistically significant addition or subtraction to their ranks of employed workers.
Feelings among economic analysts and business leaders regarding the overall American economic situation appear generally positive, if tempered by a number of tangential figures and factors. In a note released ahead of the report, Wells Fargo Securities senior economist Sam Bullard expressed this sort of guarded optimism.
"We believe the U.S. labor market remains on solid footing," Bullard stated, according to the news provider. "That said, as labor market conditions continue to tighten and the pool of skilled workers on the sidelines continues to shrink, future monthly hiring gains are likely to slow from the current hiring pace."
Numbers responsible for uncertainties regarding the labor market include the labor force participation rate, in which the BLS identified a slight decline, falling to 62.8 percent. Some economists consider this metric a better barometer of American employment due to its measurement of people who are actively working and its ability to account for individuals who've ceased seeking work in any measurable manner.
Lower than expected wage growth of 0.1 percent may also have contributed to any sense of unease experienced by company leaders, economic experts and workers.
On the other hand, Bloomberg reported that any further drop in the U.S. unemployment rate may prompt the Federal Reserve to view the figure as unsustainable in the long run, thus necessitating further hikes to federal benchmark interest rates - perhaps beyond the increases already expected to occur in 2018. The first of these is tentatively scheduled to take effect sometime in June. Also, expected surges in consumer spending and the possibility of tax cuts provide further hope of continuing overall positive performance across the American economy.
BLS Report - March 2018
The pace of job growth in the U.S. slowed down somewhat during March 2018, by comparison to the month before. On a general level, indicators for this period continued to exemplify the sustained boom of the American economy. Nevertheless, some concerns exist among business leaders and economic experts regarding what the reduction in pace might signify, particularly for trade in the near future.
According to the latest edition of the Employment Situation Summary released by the Bureau of Labor Statistics, nonfarm businesses in the U.S. added 103,000 jobs. The unemployment rate, meanwhile, remained static at 4.1 percent for the sixth month in a row. This newest figure does represent a drop of some magnitude when placed next to the 326,000 positions (revised from a preliminary total of 313,000) that American companies created in February 2018. Bloomberg reported that it fell short of the median prediction issued by the financial news network's economists, who thought the various industries of the U.S. would add 185,000 jobs.
Industries most responsible for the gains that did occur in March included professional and business services, healthcare, manufacturing and mining. The former led the pack with 33,000 jobs added, continuing on a growth path that has spanned 2018 thus far. Stemming largely from increased employment in the creation of durable goods, manufacturing created 22,000 positions, in another month of recovery for a field on the rise since 2017 after a few years of sluggishness. Healthcare also added 22,000 jobs, and mining rounded up the notable sector-by-sector expansions in employment for March with 9,000 new positions on its payrolls.
Construction and retail trade both experienced drop-offs in their payrolls, with 15,000 and 4,000 jobs lost, respectively. However, because these declines followed up considerable surges in February - the former added 65,000 jobs that month, while the latter created 47,000 - they should bring little to no detriment to either sector in the long run.
Wages for March 2018 went up 2.7 percent on a year-over-year basis, while average hourly earnings rose 8 cents between February and March of this year, BLS figures found. This increase is seen as one of the most positive figures in the latest Employment Situation Summary, as previous months in early 2018 and late 2017 saw static or slow wage rises despite all of the robust additions to companies' labor forces. March also saw the year's first hike of interest rates by the Federal Reserve - one of the initial actions by newly appointed Fed Chair Jerome Powell.
The Washington Post reported that most concerns regarding the American economic picture center around the recent tariffs the White House imposed upon steel and aluminum imported to the U.S., leading to inventory shortfalls and rashes of abrupt materials purchases. The construction and manufacturing industries, which have historically used a considerable amount of foreign steel, could see impedance to their operations based on price fluctuations and other effects of trade disputes regarding these metals. In its latest Report on Business, the Institute for Supply Management cited respondents to its queries for elaboration on these matters:
"Accurate, long-term planning has become incredibly difficult, as distributors that historically held costs for at least 30 days are now, in some cases, committing to only seven days, as prices can change drastically in that time," the ISM report stated.
However, the big picture of the U.S. economy is likely a fairly bright one due to wage gains and increases in figures like the labor force participation rate, which rose to 62.9 percent in March 2018. This increase represents an 0.2 percent uptick from the previous month and another positive step on the path toward pre-recession labor participation figures of 66 percent or greater.