Job Growth Low, But Job Losses Low Too
The BLS jobs report is out and the news is… murky? There’s growth, but not as much as expected, and employment is high, but people aren’t necessarily able to find the jobs they want. The response has ranged from panic to satisfaction. Let’s delve in.
The September jobs report is out and it’s made a lot of people worried, including market analysts. MarketWatch reports that investors and economic strategists are concerned that job growth is slowly — 58,000 fewer than predicted — with no signs that it will turnaround. And with a rate hike on the way from the Fed, some describe the outlook as “purgatory.” The poor jobs report even affected Asian stock markets, as they waited for the news.
On the other hand, Reuters reports that US joblessness is at a 42-year low. That low has been consistent, with 31 straight months of 300,000 unemployment claims. So while new hires seem to be slowing, so too do job losses. What does Reuters think it all means? That the expected Fed interest rate hike won’t drop until early next year.
InvestorPlace is pretty clear: the jobs report was disappointing. With that said, they move on to break down some aspects of the report, looking at sectors that are experiencing unusual growth or contraction: the auto sector is looking better; the energy sector is looking worse; residential construction looks good, but construction otherwise is confusing.
The US recession is over (not so the recessions continuing to plague other North and South American countries) and the country is heading back towards full employment. That’s good. But “full employment” doesn’t take into account underemployment, poor wages, and discouraged workers. As Tim Worstall reminds us, “long periods of unemployment mean that people become detached from the labour force in a rather more involuntary manner. Skills decay, of course, but employers are also extremely hesitant to employ someone who has been unemployed a long time.”
So what do we know? We know that US job growth is not where we would all like it to be. We know that the planned rate is still coming, but if it will be by the end of this year or the start of next year… well, that we don’t know. And finally, we know that job growths and losses are uneven, with some sectors booming while others lag, which means response from HR must come on a sector by sector basis. It’s not an entirely sunny picture, but it’s not an entirely gloomy picture either.