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Economic Trends  |  Workforce

136,000 Jobs Created in September, Below Consensus View

By: Beth Burnham Mace  |  October 04, 2019

The Labor Department reported that there were 136,000 jobs added in September, below the consensus estimate of 145,000. For the nine months through September, the average monthly increase in total employment has been 161,000, below the average monthly gain of 223,000 in 2018 (note that this will likely be revised down based on the recent preliminary benchmark revision estimate). Health care added 39,000 jobs, in line with its average monthly gain over the past 12 months. Revisions added 45,000 to the prior two months. The change in total nonfarm payroll employment for July was revised up by 7,000 from 159,000 to 166,000 and the change for August was revised up by 38,000 from 130,000 to 168,000. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. The September jobs report is important to the Federal Reserve and analysts because it is the first major piece of data for the fourth quarter. While not entirely consistent, data through the third quarter suggest that both the global and national economies are slowing. Indeed, the U.S. manufacturing sector is weakening as evidenced by a contraction for the second consecutive month in September in U.S. factory activity to its lowest level since June 2009. Expectations for GDP growth in the fourth quarter have also slipped to less than 2%. Global trade is slowing, and business investment is weakening due to mounting concerns about trade-related weakness associated with rising tariffs and geopolitical strife around the world. In fact, the Fed lowered interest rates on July 31st for the first time since 2008 and then again at its September 18th FOMC meeting as it reacted preemptively to concerns of a potential economic slowdown. The fed funds rate is now targeted at a range of 1.75% to 2.00%, down 25 basis points from its prior target range. Until July and since late 2015, the Federal Reserve had been gradually raising rates following six years of virtually 0% interest rates (2009 through 2015). The August unemployment rate fell 0.2 percentage points to 3.5%. The last time the rate was this low was 50 years ago in December 1969. A broader measure of unemployment, which includes those who are working part time but would prefer full-time jobs and those that they have given up searching—the U-6 unemployment rate—fell to 6.9% from 7.2%.

Economic Trends  |  Workforce

130,000 Jobs Created in August, Below Consensus View

By: Beth Burnham Mace  |  September 06, 2019

The Labor Department reported that there were 130,000 jobs added in August, below the consensus estimate of 160,000.  About 25,000 of the jobs added were temporary positions associated with the 2020 census.  For the eight months through August, the average monthly increase in total employment has been 158,000, below the average monthly gain of 223,000 in 2018. The private sector added 96,000 jobs in August, weaker than the monthly year-to-date pace of 145,000 and down from an average monthly gain of 215,000 in 2018.

164,000 Jobs Created in July, on Track with Consensus

By: Beth Burnham Mace  |  August 02, 2019

The Labor Department reported that there were 164,000 jobs added in July, quite close to the consensus estimate.  The July increase in jobs marked the 106th consecutive month of job growth.  The latest six-month average increase is 140,000, the fewest in seven years and less than last year’s 223,000 monthly average.  Nevertheless, the pace of job gains is relatively strong and generally stronger than the levels that have usually prompted the Federal Reserve to cut interest rates in the past.  That said, pressures associated with trade tensions and potential further trade-related weakness in the economy suggest that the Fed may be cutting rates further in September after this month’s 25 basis point reduction.   

More Jobs Created in June than Expected: 224,000

By: Beth Burnham Mace  |  July 10, 2019

The Labor Department reported that there were 224,000 jobs added in June, above the consensus estimate of 160,000. The June increase in jobs marked the 105th consecutive month of job growth. The latest six-month average increase is 172,000, less than last year’s 223,000 monthly average. Nevertheless, the pace of job gains is strong and generally stronger than the levels that have usually prompted the Federal Reserve to cut interest rates in the past. This suggests that the Fed will not be cutting rates immediately despite other concerns about a slowing economy or trade-related threats to the economy. In recent months, the Fed’s has indicated that it is paying close attention to the risks of an economic slowdown.