In my 2017 Housing and Economic Prediction, published in December 2016, my forecast for U.S. jobs on a monthly basis for 2017 was as follows:
“…Look for job creation numbers monthly to come down to 140K-170K a month, to account for labor force growth. I am still in the 1.9%-2.3% GDP camp.”
The jobs report released by the Bureau of Labor Statistics (BLS) today showed a job loss of 33,000 last month. We also had 38,000 negative job revisions to prior months. This would mean that the 2017 monthly job gain average is running at 148,222 per month and even if you take this hurricane job report off completely the number would come to 170,875 per month. This would mean a slight slow down in job gains which was what I was looking for.
This means that 2017 is looking exactly as I imaged it would. I have been predicting reductions in the job creation numbers since 2015, due to labor force issues. Still, even with the slight slow down we continue to are grow jobs faster than can be accounted for by population growth alone.
Yesterday on a facebook live I cautioned my followers that we could see a negative print and that we shouldn’t read too much into that because all other economic data such as the ISM Non Manufacturing Index and car sales were abnormally strong—also due, in part, to the effects of the hurricanes.
The negative impact of the hurricanes was felt in the leisure and hospitality sector.
I wouldn’t put too much weight into the year over years wage numbers as well as it rose to 2.9% tied with a cycle high. The make shift of job data gave a big boost to wages month to month and year over year. I would wait for the next few job reports to come in before confirming this 2.9% number.
The unemployment rate is down to 4.2% and the U6 rate fell to 8.3%. We are getting closer to the base floor level of 8%. Don’t be surprised if we give a little back on the U6 rate in upcoming months but the overall trend is looking good.
Large natural disasters like hurricanes always have an immediate impact on unemployment claims. This time around we had 2 devastating hurricanes back to back so big uptick in unemployment claims is to have been expected.
The take-home message here is that the job market in 2017 is looking like I thought it would– if anything it is slightly outperforming my estimates. I would keep an eye out on construction data going forward, due to the demand for more construction workers to repair the hurricane damage.
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his own facebook page https://www.facebook.com/Logan.Mohtashami