Job Growth Continues as Labor Markets Tighten Further

October 05, 2018

Job growth appears to have slowed to 134,000 in September, but gains in the two previous months were revised upward by 87,000 and the unemployment rate dropped to 3.7 percent, its lowest level since 1969.

Hurricane Florence and other seasonal factors may have affected the payroll jobs number from the business survey as the household survey, which is used for the unemployment rate, shows employment grew by 420,000 in September.  Notably, retail trade (-20,000) and bars and restaurants (-18,200) lost jobs last month, which could reverse in October with better weather. 

Average weekly earnings have increased by 3.4 percent over the past year and average hourly earnings have risen 2.8 percent.

Six industries accounted for all of the job growth:

  • Administrative Support Services, including temporary help (+30,000);
  • Health care (+25,700);
  • Transportation and warehousing (+23,800);
  • Construction (+23,000);
  • Professional and technical services (+18,900); and
  • Manufacturing (+18,000).

Over the past three months payroll job growth has cooled to an average 190,000, down slightly from 217,000 in the previous three months.

Meanwhile, a new gig economy report from the BLS shows the number of U.S. workers who participate in electronically mediated (online platform) work ranged from 1.6 million to 5.1 million in May 2017, or just 1.0 percent to 3.3 percent of total employment.  Notably, BLS believes the lower number is the best estimate given the survey questions that were asked and does not intend to use the same survey questions in the future. 

Looking ahead: The latest survey of business economists forecasts the unemployment rate to fall to 3.6 percent in 2019 and average monthly job gains to slow from 190,000 in the fourth quarter of 2018 to 170,000 in the first quarter of 2019.  The median forecast for hourly compensation growth is projected to increase from 3.0 percent in 2018 to 3.2 percent in 2019, and corporate profits are expected to rise by 4.8 percent in 2019.