Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media
October 7, 2016
Employers added a modest 156,000 jobs last month as the U.S. unemployment rate remained unchanged at 5.0 percent, according to the most recent U.S. Bureau of Labor Statistics report. The number of workers unemployed was essentially unchanged at 7.9 million. This report follows the addition of 151,000 jobs added in August.
Job growth has averaged 178,000 a month so far this year, down from last year’s pace of 229,000. Still, hiring at that level is enough to lower the unemployment rate over time. Economists have expected the pace to slow as the supply of unemployed workers declines.
“The current record of consecutive monthly job gains continued in September,” said Mark Zandi, chief economist of Moody’s Analytics. “With job openings at all-time highs and layoffs near all-time lows, the job market remains in full swing. Job growth has moderated in recent months, but only because the economy is finally returning to full employment.”
Where Job Growth Occurred
- Professional and business services employment rose by 67,000 in September and has risen by 582,000 over the year. Over the month, job gains occurred in management and technical consulting services (+16,000), and employment continued to trend up in administrative and support services (+35,000).
- Healthcare added 33,000 jobs in September. Ambulatory healthcare services add 24,000 jobs over the month, and employment rose by 7,000 in hospitals. Over the past 12 months, healthcare has added 445,000 jobs.
- Employment in food services continued to trend up in September (+30,000) and has increased by 300,000 over the year.
- Retail trade employment continued to trend up over the month (+22,000). Within the industry, job gains occurred in clothing and clothing accessories stores (+14,000) and gasoline stations (+8,000). Over the year, employment in retail trade has risen by 317,000.
- Mining employment was unchanged in September after declining by 220,000 from a peak in September 2014.
- Employment in other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, information, financial activities, and government, changed little over the month.
“Although employers have been increasingly cautious, the U.S. hiring outlook is among the strongest globally, and we expect to see modest improvements in the labor market throughout most of the country,” said Sally Stetson, co-founder and principal at executive search firm Salveson Stetson Group.
Companies Hiring at Modest Pace
CEOs expect roughly unchanged plans for hiring and nearly flat plans for capital spending in the final quarter of 2016, according to the recently released Business Roundtable ‘CEO Economic Outlook Survey.’ The report found that 27 percent of CEOs expect their company’s U.S. employment to increase in the next six months. Thirty seven percent said they expect no changes in their staff levels while another 36 percent plan to decrease staffs.
“For the past year, the Business Roundtable ‘CEO Economic Outlook’ has consistently remained below its long term average,” said Doug Oberhelman, chairman and CEO of Caterpillar and chairman of Business Roundtable. “This reflects the unfortunate new normal — where the U.S. economy is pretty much stuck in neutral rather than moving forward.
According to a separate report, 22 percent of U.S. employers anticipate increasing staff levels during the fourth quarter, according to the latest Manpower Employment Outlook Survey. This is a one percent decrease from the third quarter and a one percent increase from Q4 of 2015. Six percent of employers expect workforce reductions and 69 percent expect no change in hiring plans. The final three percent of employers are undecided about their hiring intentions.
Employers Optimistic, Yet Hesitant
“Employers are optimistic, though hesitant, with their hiring intentions and we’re pleased to see levels we were seeing before the recession,” said Kip Wright, senior vice president of Manpower North America. “While employers are looking to grow their workforces, many are challenged to find candidates with the right skills. As the hiring outlook continues to improve, attracting and retaining skilled talent will become even more difficult. That’s why we’re hearing more about companies like AT&T and Marriott that are adopting strategies to develop their employees’ skill sets and competing to attract those with the most in-demand skills – especially in industries like IT and engineering.”
A More Upbeat Outlook
A recent CareerBuilder study found an even brighter outlook with 50 percent of employers plan to hire full time, permanent workers. Another 29 percent of employers plan to hire part-time employees, on par with 28 percent last year; and 32 percent of employers plan to hire temporary or contract workers, down slightly from 34 percent last year.
“Based on our study, the U.S. job market is not likely to experience any major dips or spikes in hiring over the next six months compared to last year,” said Matt Ferguson, chief executive officer of CareerBuilder. “While certain industries or locations may produce more job growth, hiring overall will hold steady throughout the election season and through the end of the year.”