On Friday, we’ll get the latest update on jobs and pay from the federal government. Here’s what we’ll be watching for in the September BLS jobs report:
- +162,000 new jobs added to nonfarm payrolls in September;
- Unemployment rate down slightly to 3.8 percent;
- Average hourly earnings up 2.8 percent from one year ago;
- Labor force participation rate down slightly to 62.6 percent.
By nearly every measure, the U.S. economy is running hot today. On Friday most economists expect another strong September jobs report from the BLS. We’re expecting employers to have added roughly 162,000 new jobs to payrolls last month, pushing down the nation’s unemployment slightly to 3.8 percent — the lowest since April 2000.
Over the past 12 months, the economy has added an average of 194,000 jobs per month. That’s a remarkably strong pace for an economy that’s nine years into an economic expansion and hovering at full employment. A positive jobs report for September will mark the nation’s 96th consecutive month of positive job gains — an all-time record since the 1930s.
Source: Glassdoor Economic Research (Glassdoor.com/research). Code and data available at https://github.com/glassdooreconomicresearch/jobs-day-arima-forecast.
Keep an Eye on Manufacturing
Manufacturing is one sector to watch closely in Friday’s report. Over the past year manufacturing has experienced a significant jobs boom. On a 12-month average basis, the manufacturing sector has added more than 20,000 jobs per month for each of the past five months. The last time U.S. manufacturers added jobs at that pace was two decades ago in May 1998.
Manufacturers continue to experience the economic jolt of the recent $1.5 trillion federal tax cut, but are not yet feeling the economic pain of rising tariffs. As of October 1, there were approximately 298,000 open manufacturing jobs on Glassdoor, up sharply from roughly 213,000 manufacturing job postings on January 1 of this year. Although job gains slowed for manufacturing in August, we expect continued strong job gains in that sector throughout the remainder of 2018.
Wage Growth will Continue to Climb
In terms of wage growth, all signs point toward another month of rising pay growth in September as the economy tightens and a rising number of employers face labor shortages. Last month the BLS reported average hourly wages up 2.9 percent from a year ago, the fastest pace since June 2009. We expect to see pay growth of 2.8 percent from a year ago in September, setting the stage for continued wage escalation and likely hitting a symbolically important 3.0 percent pace of pay growth by the end of 2018.
In Glassdoor’s Local Pay Reports we see a clear trend toward rising pay growth, with median base pay for full-time employees rising by 2.6 percent from a year ago in September, the fastest pace since April 2017. According to salaries reported on Glassdoor, U.S. pay growth has accelerated for seven consecutive months since March 2018.
How long will the current U.S. economic expansion continue charging ahead? Since WWII, the average length of time between recessions has been about 58 months. As of the end of September, the economy will have been in the current expansion for 111 months — more than 9 years.
Since the 1850s, there’s only been one other period with a longer streak of economic growth: the 1990s, in which the economy grew steadily for 120 months. Despite many headwinds facing the economy today — including rising Fed interest rates, a slowing housing market, and rising tariffs — there’s no sign in the data of any slowing in the nation’s job market today.
To speak with Dr. Andrew Chamberlain about this month’s jobs report or labor market trends, contact pr [at] glassdoor [dot] com. For the latest economics and labor market updates, subscribe to email alerts here and follow @adchamberlain.