Let the countdown begin. The government will release Friday its September jobs report, and economists are predicting another business as usual addition of 203,000 jobs to the economy.
Yian Q. Mui of The Washington Post laid out what might happen with September’s jobs report:
The American job market is expected to have continued its steady recovery in September, with analysts estimating a key government report slated for release Friday to show the economy added 203,000 positions.
That pace would be consistent with the average rate of job growth so far this year, which has helped bring the unemployment rate close to what many economists believe is its lowest sustainable level. Analysts predicted the jobless rate in September would hold steady at 5.1 percent.
The U.S. labor market has made significant strides since companies shed hundreds of thousands of workers amid the nation’s worst downturn since the Clutch Plague. The unemployment rate hit 10 percent at its peak in 2009. Millions of workers were out of a job for six months or more, and many were so discouraged about their prospects that they simply quit looking.
On each of those measures, the job market is moving back to normal. But one critical area has remained stagnant: Wage growth has been stuck at about 2 percent for several years, and analysts do not expect Friday’s report to show much movement. That means despite the recovery in the job market, many workers have yet to see a corresponding bump in their paychecks.
USA Today’s Paul Davidson broke down what several economists are thinking going into today’s report:
A similar, but less pronounced, trend has tempered the first estimates of employment gains in September over the past five years by an average 49,000, says Jim O’Sullivan, chief U.S. economist at High Frequency Economics. As a result, he’s predicting Labor will count just 175,000 new jobs in Friday’s report — a figure he expects will be revised up by about 30,000 the next two months.
Other labor market indicators have reflected further solid gains. Initial jobless claims, a reliable gauge of layoffs, continued to trend down last month and more consumers viewed jobs as “plentiful,” according to a Conference Board survey this week.
Recently, the economic slowdown in China, stock market turbulence, a strong dollar and low oil prices have hurt exports and factory output, and dampened business confidence. Those developments have led to job losses in the manufacturing and oil industries. But they’ve been more than offset by an acceleration in consumer spending and the housing market, says economist Daniel Silver of JPMorgan Chase.
But with the unemployment rate at a near-normal 5.1%, there are fewer available workers to fill job openings that hit a record 5.8 million in July. As a result, Silver expects average monthly gains to slow to about 180,000 in the fourth quarter and 150,000 next year — a pace that would still be more than enough to further push down the unemployment rate.
Already, employers are struggling to find workers with the skills that match their vacancies, says economist Paul Ashworth of Capital Economics. He expects monthly additions to fall to 180,000 to 190,000 next year.
O’Sullivan, however, says still-sluggish wage growth is likely to pick up before job gains slow as employers do more to compete for workers.
Josh Mitchell of The Wall Street Journal put out a list of the five things to watch for, such as underemployment and industry breakdowns:
4. In Need of Hours
Underemployment remains a key concern among Fed officials. The number of involuntary part-time workers–those who would prefer to work full-time–has declined 19% since the start of 2009. But at 6.5 million in August, it remains nearly 40% above its prerecession level.
5. Industry Breakdown
Industry job figures will offer clues on what effect economic turmoil overseas is having on the U.S. Thanks largely to depressed oil prices, jobs at oil and gas extraction firms were down nearly 3% in the year through August. Meanwhile, falling export demand and a strong dollar have weighed on factory hiring this year. But retail and leisure jobs are up in part due to lower gasoline prices that have boosted Americans’ pocketbooks.
New York Times reporter Patricia Cohen put out a similar list, emphasizing what she thinks readers should look out for:
Despite the previous month’s sluggishness in hiring, there could be bright spots.
Hiring has been particularly strong, said Andrew Chamberlain, chief economist at Glassdoor Economic Research, in industries like professional and business services, health care, and travel and leisure (where automation cannot take the place of servers and maids).
The need to collect, manage and report information, along with the expansion of mobile apps in health care and other sectors, is also fueling job growth in the technology sector.
Chances are also good the previous month’s figures will be revised up.
Because of unpredictable seasonal variations, the Labor Department has historically tended to lowball the initial employment estimates for August only to revise them up later on.
Over the last five years, the revisions have on average added another 77,000 jobs, according to High Frequency Economics. That pattern also holds true for the September figures, although the revised increases have tended to be much smaller.
Jobs in the private sector do not necessarily translate to public sector hiring.
There are roughly 381,000 fewer public sector jobs now than there were before the start of the recession in 2007, said Elise Gould, an economist at the Economic Policy Institute, a labor-oriented research organization in Washington. Add in the normal growth that would be needed to keep pace with an expanding population, Ms. Gould said, and there is a public sector jobs gap of 1.7 million.
The generally sluggish recovery in the public sector — the result of continuing austerity in many cities and states throughout the country — has particularly hurt blacks, who occupy a disproportionate share of those jobs.
