Unemployment Rate Predicted Steady
The monthly jobs report is typically based on data from the Bureau of Labor Statistics. As no update was issued due to the federal government shutdown, this month’s insights are based on other relevant employment trends and forecasts.
Jobs Growth
Following a reported 22,000 new jobs in August, September labor market activity is expected to generate about 50,000 new positions.
Top Industries
Aligning with recent trends, the majority of job gains in September are likely to be recorded in healthcare and social assistance. Losses can likely be expected in federal government employment.
Unemployment
Little movement is expected in the unemployment rate, leaving it unchanged at 4.3% in September.
Wages
Average hourly earnings for September are expected to be unchanged from August, when the 12-month average gain was 3.7%, with a month-over-month rise of 0.3%.
Work Week
Weekly hours for September are likely to remain unchanged, coming in at 34.2 hours for the fourth month in a row.
Temporary Job Trends
With employment in the temp sector on a downward trajectory in recent months, it is expected that fewer new flexible jobs will again be reported for September.
What Does It All Mean?
Although the official numbers are not on the books from the federal government, most economists and workforce watchers agree that jobs growth will be tepid in September, in line with trends in recent months.
The open question continues to be whether the labor market is experiencing a permanent slowdown or if perhaps the market is undergoing a reset. From May to August, the economy added an average of 25,000 jobs per month. Compare that to both pre- and post-pandemic hiring, when the economy was more typically generating new jobs in the range of 185,000 to 215,000 per month. This higher level of activity may simply no longer be sustainable as the workforce continues to shrink.
There may be a real need for rebalancing in the labor market. Experts point to a number of contributing factors, from near-term changes in immigration and increasing numbers of the long-term unemployed exiting the workforce, to the bigger realities of Baby Boomer retirements and lower birth rates. The impact of AI also remains uncertain, although it is considered a key contributor to a current reduction in entry-level positions, making it difficult for recent grads to secure employment.
With so many indicators continuing to flash yellow, employers remain cautious, hesitating to move forward with any bold hiring initiatives until the future is less uncertain. At the same time, employees seem to be staying put, opting for security over mobility. It may be an ideal time for employers to refocus on internal initiatives designed to upskill the current workforce and strengthen retention. Those efforts can help ensure employees choose to stay, not just for a secure bet but for a better bet.
Sources: U.S. Bureau of Labor Statistics, Staffing Industry Analysts, MarketWatch CNBC, Bloomberg, The New York Times, FOX Business, CBS, CNN, NPR, Dow Jones, FactSet, Chicago Fed
