For 2019 I predicted this:
“I expect job creation numbers to fall but stay in the range of 137,000 – 157,000 per month.”
I believe I had the lowest job growth forecast out there and have been usually lower than most since 2015. So I wasn’t shocked to see the recent BLS revision to the job gains go negative. Unlike some people, I don’t believe we have a vast pool of unlimited workers sitting at home since 2010 or 1945, waiting to come back to the workforce. I love the fact that we are debating if we are at full employment with this record job expansion. If you really had a first world problem, this is it. We are in uncharted territories with some of the job data, so hopefully, we can keep this record job expansion going for many years to come.
Still a year to date, job growth is beating my forecast at 160,777.
3-month average running at 156,666.
“The unemployment rate declined to 3.5 percent in September, and total nonfarm payroll employment rose by 136,000, the U.S. Bureau of Labor Statistics reported today. Employment in health care and in professional and business services continued to trend up.”
(Private payroll was running at 114,000)
I love the debate on full employment and inflation. I believe it’s a healthy conversation to have regarding the Federal Reserve and rate hikes.
More on the Fed here: The Fed Being Too Tight Now Is Just Silly
I have talked about for some time now that if job growth slows to below between 123K- 83K and job openings break out toward 8-10 million, then let’s have a real full employment discussion then. Again, a total first world problem here. Job growth is slowing, and openings while historically high are not making another move higher.
However, people still believe in the missing labor force that hasn’t worked since 2010 or 1945. While admirable, some people tend to over-exaggerate the issue. My advice for some labor economist is to gather a pool of the long term unemployed people and have one on one conversation to understand more directly why it has been hard for them to find work or if they even want to work at all. One thing that a Job Gurannate plan that the MMT people push that I do like is that it can prevent long term unemployed workers from staying unemployed if they really want to work. If they don’t want to work, we have no laws that can force them to work directly. People get fired every month no matter how long the economic expansion lasts, and individual pockets of the U.S. do have higher than trend unemployment rates. Even with this reality, the majority of Americans that want to work are working, and a tighter labor market is allowing people who don’t have the best resumes or skills to get hired. This is positive, and we should never lose focus of that.
Job growth, while slowing down, continues to outperform my expectations. We are producing a very healthy number of jobs needed vs. population growth. This is a true reflection of our American work ethic, especially considering the duration of this economic cycle.
Today, the U6 Unemployment Rate is still below the pre-recession lows and almost at all-time lows.
I stress to everyone now, keep an eye out on unemployment claims which are forming and bottom in this cycle, and the job openings data, which still has a massive gap between openings and hires. When job openings start to go below hires, then begin to be mindful of the job market. However, we aren’t there yet, folks. To my bearish American friends who have been wrong about America since this expansion and really since 1790. Your recession calls are still too early.
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