November 3, 2023
Payroll employment climbed by 150 thousand in October after gaining 297 thousand in September. In the past three months the average increase has been 204 thousand. At the beginning of this year we were routinely seeing employment gains of 300 thousand per month. Thus, the labor market has clearly softened from where it was at that time, but the reality is that it has held up well in the face of sharp increases in interest rates. It is important to remember that the employment gain in October was held down by the loss of 33 thousand workers in the automobile sector caused by the UAW strike. Employment will increase by that amount when these workers return to work in November.
In addition to hiring workers employers can also alter the length of the workweek for their existing workers. The nonfarm workweek fell 0.1 hour in October to 34.3 hours after having been unchanged in September at 34.4 hours. The workweek is still just a shade below where it was at the beginning of the recession so it is still at a level that portrays steady growth.
Job openings have fallen from a record high level of 11.7 million in early 2021 to 9.5 million, but firms continue to be unable to fill open positions. In fact, there are currently 1.5 job openings for every unemployed worker. The demand for labor continues to outpace supply.
The changes in employment and hours worked are reflected in the aggregate hours index which fell 0.3% in October to 115.4 after rising 0.3% in September. This index appears to be on track to increase 1.1% in the fourth quarter which.is reasonably consistent with our projected fourth quarter GDP growth rate of 1.5%.
The demand side of the economy has softened slightly but not enough to cause workers to start laying off bodies.
Manufacturing employment fell 36 thousand almost all of which was in the automobile industry as a result of the UAW strike. Those workers will once again be included in payroll employment when they return to work in November. Construction employment rose by 23 thousand. Retail trade jobs rose by 1 thousand. Health care jobs gained 58 thousand. Social assistance climbed by 19 thousand. Info tech jobs fell 9 thousand. Trade, transportation and warehousing fell by 12 thousand. Leisure and hospitality jobs climbed by 19 thousand. Professional and business services rose by 15 thousand. Financial sector jobs fell 2 thousand. Government jobs rose by 51 thousand almost exclusively at the state and local level.
Given these steady employment gains we expect GDP growth of 1.5% in the fourth quarter but slowing to 0.6% in each of the first two quarters of next year.
Stephen Slifer
NumberNomics
Charleston, S.C.
Steve –
In the first two lines, I believe your number for the average is incorrect and should
be 356,000 rather than 234,000.
You area correct Frank. I just changed it. Employment Fridays are tough. So much data to sift through on those days. Need to digest that, write something about each tidbit, and then write the weekly commentary. Easy to miss something.
Thanks for the heads up.
Is there a way to superimpose this data with the number of layoffs over the course of the same timeframe?
I keep hearing that there are a lot more layoffs this year but I don’t know where to verify that. Thanks!
Hi Tina,
I will send you a chart on initial unemployment claims (layoffs) to your e-mail. I would include it here but somehow I cannot figure out how to get these responses to include a chart. The bottom line is that layoffs overall have been dead flat for almost two years. We keep reading about layoffs by various firms, but it appears that those folks who lose their job are easily able to find a job somewhere else.
It could be the the UAW strike is beginning to boost layoffs, but that will presumably be just a temporary jump.
I tried to send the charts to tinacartigane@gmmail.com (shown above). It came back. Changed it to gmail.com. It came back again. If you give me your email address I will resend.