Storms Impact Job Data
The September BLS Establishment Survey was below consensus with a “headline” decline of 33,000 vs. estimates for a gain of 90,000. Not surprisingly, the largest declines were in heavily storm impacted Leisure & Hospitality with a decline of 111,000. The Household Employment Survey, which brackets different dates that were not in the hurricane timeframe, posted the strongest gains since December 2015 with 575,000 jobs added. In addition, we saw a decline in unemployment to 4.2 percent. Another positive is that the temp penetration rate hit an all-time high of 2.08 percent.
My strongest advice to employers is to not let the storm impacted data distract you from a strengthening underlying trend, highlighted by Federal Reserve Chair Janet Yellen. The percentage of companies that report difficulty finding qualified workers is back to levels last hit before the Great Recession, and many have responded with plans to increase wages and signing bonuses — “possible harbingers of stronger wage gains to come,” according to Ms. Yellen. The latest jobs report confirmed her optimism, with hourly wages rising at the fastest rate yet recorded in this recovery. In many markets, year over year wage increases for in demand IT skills ran far greater national averages, with skill shortages in IT only expected to become even more acute in the coming years.
About the Author, Michael Blackman
As Chief Corporate Development Officer at Kforce, Michael Blackman, a 25-year Kforce veteran, is the primary focal point for the Firm with the Wall Street and financial communities. He is regularly sought out by leading economists for his perspectives on the economy and labor markets, and he contributes to a number of key proprietary economic publications.