April 6, 2018 • Posted in Economic & Employment News, Economic Straight Talk, Featured Posts, Pacific Union Insights
- Today’s national employment report from the U.S. Bureau of Labor Statistics did not live up to expectations, with the country adding 103,000 jobs in March and the report including a downward revision of 50,000 jobs for January and February. Over the last year, U.S. employers added 2.261 million jobs in total. The unemployment rate held steady at 4.1 percent, comparable to numbers recorded in 2000. While last month’s job additions alone may be disappointing, February’s strong gains — triple March numbers — may have pulled forward some of the growth. Still, the job market is off to a solid start in 2018, with an average of 202,000 jobs added per month during the first quarter.
- Economists believe that large monthly job gains will be difficult to sustain at the current unemployment rate without significant retraining of the labor force and/or wage growth.
- Furthermore, low March numbers are mostly due to large fluctuations in construction and retail jobs. The construction sector added 65,000 jobs in February, then lost 15,000 in March due to weather patterns — particularly in the Northeast, where winter storms hit hard last month. Still, the U.S. construction sector has seen solid growth this year, adding a total of 78,000 jobs. The retail sector saw similarly large variations.
- The manufacturing sector added the most jobs in March at 22,000, with the gain entirely in the durable-goods industry, especially in fabricated metal products. Over the past year, the manufacturing sector has added 232,000 jobs, with durable goods accounting for about three-quarters of the growth.
- Over the last year, the professional services and health care sectors added the most jobs, followed by hospitality, manufacturing, and construction. Information was the only sector that lost jobs over the last 12 months. However, the information sector has fared a bit better in Silicon Valley, where it posted some gains over the last year. Overall, California’s information jobs have been declining, though overall job gains have been broad across all industries.
- While job gains have remained solid, much-anticipated wage growth has been slow to follow. In March, hourly and weekly wages inched up, though weekly wages rose at the fastest pace since 2011. Wage growth has been especially strong in the finance industry, where weekly wages jumped 6 percent from one year ago. All other industries showed wage gains of less than 4 percent, with the average across private-industry jobs at 3.32 percent. Construction showed the second-highest increase after finance, at 3.96 percent. Strong gains in finance wages have partially driven demand for homes in San Francisco and the rest of the Bay Area.
- Participation in the labor force is another closely monitored job indicator, and it has been rising since bottoming out in 2014. The share of prime-age population in the labor force — those between 25 and 54 years of age — is now at 82.1 percent. While not increasing in March, labor force participation growth has generally been strong over the past year. Greater labor force participation indicates that workers are encouraged by higher wages and more job opportunities.
- Another report on job opportunities, the Job Openings and Labor Turnover Summary report from the U.S. Bureau of Labor Statistics, shows that the number of openings increased to a series high of 6.3 million at the end of January, up by 645,000 from December 2017. The number of job openings increased the most in professional and business services, up 215,000; transportation, warehousing, and utilities, up 113,000; and construction, up 101,000. The fact that most openings are in the professional and business services sector suggests that there are more jobs than qualified employees.
- Tech companies created 9,000 positions in March according to CompTIA, led by IT services and custom software. Data processing, hosting and related services, computer and electronics manufacturing, and other information services (including search portals) also added jobs in March. IT job listings were also up a notable 27,700 from February to a total of 137,000 open positions. Almost half of the openings are for software and application developers.
Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.
(Promotional photo: iStock/g-stockstudio)