Job Growth Loses Steam in September

By Toni Vranjes

October 7, 2016

The economy added on another 156,000 jobs last month, but the growth wasn’t particularly impressive.

“Job growth is slowing, get used to it,” wrote IHS Global Insight economist Patrick Newport in an analysis.

up_arrow_5_pt_0For September, the labor force increased by 444,000, according to new government data released today. The unemployment rate – which had held steady at 4.9 percent for the previous three months – went up slightly to 5 percent.

The industries that expanded included the professional and business category, with 67,000 new jobs; and health care, which gained 33,000 positions.

Employment growth reached 167,000 in August, according to revised government figures. On average, monthly job growth so far this year is 178,000. In contrast, the average was 211,000 during the same period last year, Newport noted.

In addition, the government revised employment growth downward by 7,000 jobs for July and August combined.

“Over the next 12 months, the average is expected to fall below 150,000,” he wrote. “That’s not bad news. It’s just that a declining unemployment rate will no longer aid job growth.”

Meanwhile, wages were up by 6 cents in September, and have increased by 2.6 percent during the past year. Wages are the final lagging indicator of an improving labor and job market, according to Andrew Challenger, vice president of outplacement firm Challenger, Gray & Christmas.

Many labor markets in the U.S. are experiencing fierce competition for talent, Challenger said. He noted that 84 metro areas have unemployment rates at or below 4 percent, which is why wages are increasing. Employers are fighting to keep and attract the best employees, he observed.

“They see enough growth in the future that they’re willing to pay to invest in talent,” he said.

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