The Labor Department released its July jobs report which shows that U.S. employers added 164,000 jobs in July, in line with many analyst expectations. The unemployment rate stayed at  3.7%. Year-over-year wage growth grew to 3.2%, well ahead of the rate of inflation. U.S. employers have added to payrolls for 106 straight months, extending the longest continuous jobs expansion on record.

The Numbers

164,000: The economy added 164,000 jobs in July.

3.7%: The unemployment rate remained at 3.7%.

3.2%: Wages increased at a rate of 3.2% over the last year.

The Good

The longest continuous job expansion in the nation’s history extended another month with 164,000 new jobs added to the economy. The unemployment rate remained at 3.7%, a figure close to historic lows. Year-over-year earnings increased to a healthy 3.2%.

There was also good news for those who were working part-time out of economic necessity. The number of persons employed part-time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 363,000 in July to 4.0 million. These individuals, who would have preferred full-time employment, were working part-time because their hours had been reduced or they were unable to find full-time jobs. Over the past 12 months, the number of involuntary part-time workers has declined by an impressive 604,000.

Among the marginally attached, there were 368,000 discouraged workers in July, down by 144,000 from a year earlier. Discouraged workers are those not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in July had not searched for work for reasons such as school attendance or family responsibilities. The decrease in discouraged workers reflects that confidence that enough jobs have been created to lure these individuals back into the workforce.

The Bad

The rate of job growth is definitely slowing. Over the first seven months of the year, the economy added 165,000 jobs a month, on average, below 2018’s average monthly pace of 223,000. The July report also shows a fall in the number of hours worked. The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.3 hours in July. In manufacturing, the average workweek decreased by 0.3 hour to 40.4 hours, and overtime declined by 0.2 hour to 3.2 hours. The decline in manufacturing hours can be attributed to uncertainty caused by the tariffs on foreign goods which have been growing on key trading partners like China.

While this slowing rate of growth may not be a cause for concern, the slowing rate combined with reduced hours has provoked pessimistic responses from some analysts:

“If I were to give a grade to the July employment report it would be a gentlemen’s C: Three-month average has declined to 140K, the downward revisions to May and June, and that decline in hours worked, which impacts your median household, is not encouraging.”

The Unknown

While 106 months of continuous job expansion is certainly viewed as good news for American workers, this extended job growth has increased competition among employers for increasingly scarce talent. One sector that has been most impacted by the tight labor market is hospitality. As the New York Times reported on the challenges employers face as part of its reporting on the July jobs report:

“A survey of business owners last month by the National Federation of Independent Business found job creation remains at a historically high level.

Ask pretty much any general contractor, hospital leader or restaurant owner about his or her biggest headaches, and a lack of qualified workers comes up.

‘Ten percent of our positions are always open,’ said Ignacio Garcia-Menocal, a co-founder and chief executive of Grove Bay Hospitality, which operates several celebrity-chef restaurants and employs 450 people. With two restaurants opening soon, Mr. Garcia-Menocal said he was looking to hire 40 to 50 people, from dishwashers who start at $10 an hour to general managers, whose salaries can range from $70,000 to $90,000 a year.”

It is unclear how long many businesses can continue operating normally with job vacancy rates at 10% or even higher. In the short term, these businesses could incur higher overtime costs and increased wage demands as they ask their employees to perform at greater efficiency. In the long-term, many enterprises will need to re-think their recruitment and retention strategies if they want to remain profitable in the most challenging labor market in recent memory.

Australia’s unemployment rate remained at 5.2% in June with only 500 jobs added to the economy. Unemployment is at its highest level since August 2018. The Bureau of Statistics reports an increase of 21,100 persons in full-time employment and a decrease of 20,600 in part-time positions. The labour participation rate held steady at 66%.

Numbers

500: The Australian economy added 500 jobs in June.

5.2%: The Australian unemployment rate remained at 5.2%.

66.0%: Labour force participation stayed at 66.0%.

+2: The Business Confident Index fell to +2 in the latest NAB release.

Upside

The headline of only 500 jobs added in June masks the good news that 21,100 full-time positions were created balanced by the loss of 20,600 part-time positions. At 66%, approximately two-thirds of the Australian population is now participating in the workforce, up 0.3 percentage points from a year ago. 

The underemployment rate which includes those who are working part-time but want full-time employment and full-time workers whose jobs were unable to provide full-time work hours dropped 0.4 percentage points to 8.2% in June. Western Australia had a significant gain of 13,800 jobs.

Downside

Every state except Western Australia posted job losses in June. The largest decreases were in New South Wales down 17,400, followed by Queensland, which lost 8,200, South Australia, which decreased by 4,700, and Victoria, which lost 4,100. Unemployment was at 4.9% in February, and it has been higher ever since. 

The lackluster job growth combined with other factors is causing some analysts, such as AMP Chief Economist Shane Oliver to forecast limited expansion of the labour market in the near term:

 “We see a further slowdown in jobs growth over the next six months,” Oliver said, citing a slowing in jobs ads, vacancies and hiring plans.

Job Opportunities and Candidates Not Aligned

A recent study by the global employment site Indeed reports that the titles of Australian job seekers were aligned with the jobs being posted only about 50% of the time and that Australia has a higher mismatch rate than the United States or the UK. This disparity was measured by comparing the titles on the active job seekers’ resumes and the titles of the jobs that are posted. In contrast to the mismatch of nearly half of the Australian job seekers, the figures showed comparable mismatches in the UK of 40%, approximately one third in the United States and less than one third in Canada.

One reason for this significant gap in Australia is that the “job mix” has changed rapidly in recent years. Job mix can be defined as the job titles and the number of those holding these titles in a given economy.

Indeed’s Asia Pacific Economist Calliam Pickering noted, “Australia’s labour market is evolving, with the job mix 22% different in December 2018 than in January 2014.”

Pickering warned that the evolution of Australia’s job mix could result in skills shortages, which could harm both job seekers and employers:

“Businesses may lower expectations for skills or experience, while job seekers might accept positions that fail to fully utilise their skills or education,” he said.

The report presents a scenario in which roughly half of Australian job seekers may not have the skills or experience to succeed in the current job market. This suggests that Australian employers cannot rely on their traditional recruitment strategies and should actively seek out expertise from organisations like recruitment process outsourcers to attract the right talent in a rapidly changing environment.

The July Labour Market Report released by the Office for National Statistics includes the quarter covering March through May 2019. In that period, 28,000 jobs were created as the unemployment rate remained at 3.8%, continuing its lowest level since 1974. Nominal annual wage growth increased to 3.6%, a level not seen since 2008.

Notable figures from the June report include:

• The UK employment rate was estimated at 76.0%, higher than a year earlier (75.6%); however, the rate was 0.1 percentage point lower since the last report, the first quarterly decrease since June to August 2018.
• The unemployment rate for men was 4.0%, slightly lower than a year earlier (4.2%). For women, the rate was 3.6%, the lowest since comparable records began in 1971.
• Estimates for March to May 2019 show 32.75 million people aged 16 years and over in employment, 354,000 more than for a year earlier.
• This annual increase was primarily due to more people working full-time jobs, up 247,000 on the year to reach 24.09 million.
• Part-time work had an annual increase of 107,000 reaching 8.66 million.

Slowing Job Gains

The 28,000 jobs created in the March-May period is only slightly lower than the 32,000 new jobs reported last month, but it is less than one-third of the 99,000 jobs reported in May. The contrast is even more striking against other recent quarters including the last three months of 2018 when 222,000 jobs were added.

The positive news is that jobs are still growing, albeit at a slower rate. Employers continue to be challenged by the low unemployment rate as well as an increase in the number of self-employed, particularly those who are working part-time:

“The labour market continues to be strong,” said ONS deputy head of labour market statistics Matt Hughes. “The number of self-employed part-timers has passed one and a half million for the first time, well over double what it was 25 years ago,” he added.

Healthy Wage Growth

Wages for UK workers grew at the fastest pace since in 11 years with gains significantly outpacing inflation. New National Living Wage and National Minimum Wage rates have both been introduced in recent months, and some NHS staff have been given pay increases. These government fueled initiatives should have the biggest impact on lower-paid and public sector workers.

However, it appears that market forces, such as the tight supply of talent, may be the key to the substantial rise in wages. Among the sectors which reported the largest annual wage increases were Finance and Business Services at 4.3% and Construction at 4.4%, both of which would have been relatively unaffected by the new wage measures.

Extended Brexit Deadline and Improved Employer Confidence

The Brexit extension until October 31 appears to have had an impact on the outlook of UK employers.

According to a recent report from the Recruitment & Employment Confederation (REC), “employers’ confidence both in the UK economy and in their own businesses has started to improve since the extension to the Brexit deadline, with employers’ confidence in making hiring and investment decisions increased by 4 percentage points from the previous rolling quarter, returning to positive territory at net +1.”

Lack of suitable candidates remains a concern as 43% of employers expressed concern over the sufficient availability of appropriate candidates for permanent positions this quarter. The three sectors causing most concern were health & social care, hospitality and engineering & technical. These areas have a legacy of high dependency on non-UK nationals.

The labour market also remains tight with four in five employers (78%) reported having little or no surplus capacity in their workforce this quarter. This included 37% reporting having no extra capacity at all.”

Even if the rate of job growth continues to slow and as the uncertainty of Brexit looms, it is clear that those employers with the expertise to recruit and retain talent will continue to have a definitive advantage over their competitors in a turbulent market.

Statistics Canada reported that the nation’s unemployment rose to 5.5%. In June, the economy shed 2,200 jobs, a month in which analysts had expected job gains. Weekly annual wage increases were up 3.6%, a significant jump from the previous month. Job losses were entirely due to part-time employment. The economy shed more than 26,000 part-time jobs while gaining just more than 24,000 full-time positions.

The Numbers

-2,200: The economy lost 2,200 jobs in June.

5.5%: The unemployment rate rose to 5.5%.

3.6%: Weekly wages increased 3.6% over the last year.

The Good

Statistics Canada reported that the economy added more than 24,000 full-time jobs and that weekly wages were up 3.6% over last year. This is a marked increase over the 2.2% annual increase in May. The nation’s unemployment rose to 5.5% from last month’s record low, but the increase occurred because more Canadians joined the workforce.

In the second quarter of this year, employment rose by 132,000 with almost all of the new jobs coming from full-time positions. In the last year, employment increased by 421,000 or 2.3%. Most provinces saw little change in their employment level, but both Alberta and Saskatchewan had job increases. In June, there were more Canadians employed in health care and social assistance; educational services; transportation and warehousing; and information, culture and recreation.

The Bad

The headline statistic of the June report is a loss of 2,200 jobs in June, and that could be interpreted as a sign of a slowing economy. More than 26,000 part-time jobs were lost in June.  Manitoba, New Foundland and Labrador lost jobs last month. Sectors that had job decreases included wholesale and retail trade, “other services,” manufacturing and natural resources. 

Employment in manufacturing dropped by 15,000, which is the first monthly decrease since July 2018. Several provinces had job losses in manufacturing including Quebec, British Columbia and Alberta. Additionally, Canadian production has fallen at its fastest rate in three and a half years, with the decline attributed to trade tensions and uncertainties.

The Unknown

June’s job report showed dramatic increases in annual wage gains. In addition to the weekly annual increase of 3.6%, hourly wages grew a full percentage point over May to 3.8%, the strongest growth in a year and the second best in a decade. In Quebec, annual hourly wage growth hit 5%. It is not clear why there was such a sharp increase in wage gains in June, and it remains to be seen whether this trend will continue. If it does, employers may see an increase in those voluntarily leaving their jobs if they feel that their wages are not rising quickly enough.

However, as the CBC reports, Canada does not have an equivalent to the U.S. Job Openings and Labour Turnover Survey, or JOLTS, which could provide a better picture of the strength of the labor market.

“Julia Pollack, labour economist with the California-based job search company ZipRecruiter,…is one of those who says rising jobs and wages may be part of a trend…Like central bankers, the Harvard-trained Pollack thinks a bit of wage inflation could be a good thing for the economy. And unlike some who think low wages make an economy strong, the private sector economist begs to differ.

‘Rising wages are the way to improve people’s real consumption and living standards,’ said Pollack.

And she said that for those who think they are falling behind, now, during a labour shortage may be the time to put yourself out on the job market.

‘On average, quitting a job leads to something like a seven per cent or eight per cent increase in earnings, and it’s responsible for a pretty large share of overall wage increases over one’s lifetime.’”

The Labor Department released its June Jobs Report which shows that U.S. employers added 224,000 jobs in June, beating analyst expectations. The unemployment rate increased to 3.7% last month. Year-over-year wage growth remained at 3.1%, well ahead of the rate of inflation. U.S. employers have added to payrolls for 105 straight months, extending the longest continuous jobs expansion on record.

The Numbers

224,000: The economy added 224,000 jobs in June.

3.7%: The unemployment rate rose to 3.7%.

3.1%: Wages increased at a rate of 3.1% growth over the last year, the same rate as last month.

The Good

224,000 new jobs were added to the economy adding to the longest continuous job expansion in US history. The unemployment rate increased to 3.7%, but for a positive economic reason, more Americans joined the labor force. Year-over-year earnings remained at a solid 3.1% significantly beating the latest reported inflation rate of 1.8% as measured by the Consumer Price Index (CPI).

June hiring was led by significant gains in the healthcare sector, which added 50,500 jobs, and in transportation and warehousing. The manufacturing sector, which has not seen strong increases for much of the year, added 17,000 jobs last month. Construction firms posted 21,000 new employees in June.

The Bad

Despite the strong gains in June, there is evidence that the rate of job growth is slowing. Employment growth has averaged 172,000 per month so far this year, compared with an average monthly gain of 223,000 in 2018. The broader measure of unemployment and underemployment which includes those who are too discouraged to look for work, plus Americans working in part-time jobs but who want to work full-time, rose to 7.2% in June from 7.1% in May.

The retail sector shed jobs in June as the brick and mortar retail apocalypse continued. As retail businesses shutter, related jobs such as security, warehousing and maintenance may also be adversely impacted in the coming months.

Prime working years are considered to be from the ages of 25 to 54. In June, 79.7% of those in this age group were employed, down from 79.9% in February and well below the record high of 81.9% in April 2000. If this downward trend continues, there may be significant challenges in the nation’s talent supply in the years to come.

The Unknown

The rate of those voluntarily leaving their jobs or “quit rate” has remained unchanged at 2.3% for nearly a year. Even though job openings have eased somewhat, the number of unfilled positions remain near historic highs. While the number of US job openings and the number of unemployed reached its widest gap ever according to reports released last month, employers cannot rely solely on those without work to fill their talent needs.  It is unclear if the rate of workers voluntarily leaving their jobs, presumably for new ones,  will increase in the near future. 

The 28,400 jobs added in April beat some analyst expectations, but the loss of full-time jobs and rise in the unemployment made for a disappointing report. In seasonally adjusted terms, 28,400 new jobs were created, with 34,700 new part-time roles balancing the loss of 6,300 full-time positions. The unemployment rate rose to 5.2%, the highest level in eight months.  

Upside

The Australian economy added 42,300 jobs in May. The labour force participation rate rose to 66.0%, reaching a record high level for the second month in a row. The business confidence index increased to +7, just above the long-term average. Since May 2018, full-time employment increased by 266,300, while part-time employment increased by 93,900.

The largest increase in employment was in New South Wales (up 38,500), followed by Victoria (up 28,600) and Queensland (up 7,800).

Downside

The job growth was almost entirely due to part-time positions. The full-time job increase was just 2,400, much lower than the addition of 39,800 part-time positions. The unemployment rate held steady at 5.2% due to the increase in the participation rate. When the unemployment rate rose in April, it reached its highest level in eight months.

The underemployment rate increased one-tenth of a percentage point to 8.6%. Underemployed workers are defined as part-time workers who want to work more hours than they are and are available to do so as well as full-time workers who worked part-time hours for economic reasons.
 

Even the robust growth in part-time jobs may not be an indicator of continued job increases but a result of the recent national elections:

“CommSec chief economist Craig James said the data covered the federal election period and may account for the skew to part-time workers.

‘Clearly there are temporary jobs created each three years for election-related roles,’ Mr. James said.”

Western Australia had a net job loss of 4,000 and Tasmania had a decrease of 400 positions.

How Long Will the Confidence Last?

While the business confidence index rose in the latest release, business conditions and other key indices were weak clouding the economic outlook:

“’Business confidence saw a post-election spike in May,’ said NAB Group Chief Economist Alan Oster. Interviewing for the survey started on May 20, two days after a federal election saw the Coalition government returned to power.

‘Expectations of rate cuts may also have helped.’

There had been mounting speculation last month that the Reserve Bank of Australia (RBA) would soon cut interest rates, which it duly did at its June 4 policy meeting.

‘While confidence, at least at face value was a positive outcome, business conditions deteriorated further,’ cautioned Oster. ‘Trading conditions and profits are particularly weak.’

The survey’s measure of trading, or sales, slipped 5 points to +3, while profitability fell 4 points to -3. Forward orders also dropped a point to -3.

‘Forward-looking indicators suggest that the bounce in confidence is likely to be short-lived and that conditions are unlikely to turn around any time soon,’ said Oster.”

The June 2019 Labour Market Report released by the Office for National Statistics includes the three months covering February 2019 through April 2019. The unemployment rate held at 3.8%, continuing at a level not seen since 1974. Nominal wage growth was 3.4%. The growth in jobs and wages beat analyst expectations.

Notable Figures

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• The UK employment rate was estimated at 76.1%, higher than a year earlier (75.6%) and the joint-highest on record.
• The UK economic inactivity rate was estimated at 20.8%, lower than a year earlier (21.0%) and close to a record low. This statistic reports the number of people who are economically inactive as a percentage of the total working age population (people aged 16 to 64 years). A person of working age is counted as economically inactive if: they are out of work and have not been actively looking for work in the past 4 weeks.
• The employment level for women was 72.0%, the highest since comparable records began in 1971.

Modest Job Gains Compared to Previous Months

The report showed impressive year-over-year job gains. Estimates for February to April 2019 show 32.75 million people aged 16 years and over working, which is 357,000 more than for a year earlier. This annual increase was due entirely to more people working full-time (up 402,000 on the year to reach 24.15 million). Part-time working showed a fall of 45,000 on the year to reach 8.60 million.
 

The 32,000 job increase in the June report is less than a third of the 99,000 jobs added in the May report. The relatively low number indicates a slow-down in hiring, at least temporarily. It is the lowest number of new jobs since the three months leading to August last year. The reason for the decreased number of new hires may be due to employers having a difficult time hiring new staff in a tight labour market.

Economic uncertainties, primarily driven by Brexit, may be the reason that employers have been on a hiring spree and despite slowing growth rates, the job growth trend may continue as the Financial Times reports:

“In the last three years, the UK labour market has shown resilience, despite a weakness in investment growth.

‘Employment growth has undoubtedly been lifted by businesses preferring to employ rather than commit to investment given current heightened uncertainties,’ said Howard Archer, chief economic adviser at EY ITEM Club, a consultancy. ‘Employment is relatively low cost and easier to reverse if business subsequently stalls,’ he added.”

Healthy Wage Increases

Whatever the cause of low unemployment and continued hiring, the increase in year-over-year nominal wages of 3.4% is a sign that businesses are responding to consistently tightening labour market conditions. In the report released in August 2018 when unemployment was at 4.0%, the year-over-year wage increase was just 2.7%.

While the inflation rate rose to 2.1% in April, the rate of annual wage growth is still well ahead of it. The combination of increased wages and low inflation strengthens the buying power of UK consumers and potentially provides a boost to the overall economy.  This point is underscored by the effect that the rate of increased wages reported impacted the nation’s currency as the pound strengthened in trading as The Express explains:

“This morning’s UK average earnings figures increased in April, exceeding the consensus expectation and rising to 3.4%, providing some uplift to the pound. This will be seen as good news by Sterling investors as rising wages normally translates to increased spending power, which in turn boosts domestic growth.”

Statistics Canada reported that the nation’s unemployment fell to a record low 5.4%. In May, 27,700 jobs were added to the economy, far lower than the 107,000 jobs added in April, but still beating analyst expectations. Weekly annual wage increases were up 2.2%. All of the job gains were in full-time positions and those in the self-employed category, which incorporates freelancers and independent contractors.

The Numbers

27,000: The economy added 27,700 jobs in May.

5.4%: The unemployment rate fell to at 5.4%.

2.2%: Weekly wages increased  2.2% over the last year.

The Good

Statistics Canada reported that the nation’s unemployment fell to 5.4%, a record low. The economy added 27,700 jobs, far ahead of analyst expectations. The job gains in May came from full-time work and from the self-employed category. Over the past year, employment grew by 453,000 or 2.4%, reflecting gains in both full-time (+299,000) and part-time (+154,000) work. This is the biggest year-over-year increase since before the 2008-2009 recession.

Employment in Ontario rose by 21,000 in May, with notable increases among the core-aged population and among women. Three other provinces had net job increases; British Columbia at 17,000, Nova Scotia at 4.500 and New Brunswick at 3,000. There were 20,000 more people working in health care and social assistance in May, bringing year-over-year gains in this industry to 89,000 (+3.7%). Over half of the monthly increase in this sector was in Ontario.

Employment in professional, scientific and technical services was up 17,000, more than offsetting a decline in the previous month. The increase in May was concentrated in Ontario, while smaller increases were also registered in New Brunswick and Saskatchewan. Compared with 12 months earlier, employment in this industry grew by 67,000 (+4.5%). Employment in transportation and warehousing grew by 10,000, driven by increases in Ontario and Alberta. On a year-over-year basis, employment in this sector rose by 60,000 (+5.6%).

The Bad

Despite record low unemployment, the rate of wage growth is still disappointing. In August 2018, annual average weekly wage increases stood at 2.9% while in May it was just 2.2%. Sluggish wage growth impacts the purchasing power of Canadian consumers and can have a negative effect in the overall economy. 

Employment in Newfoundland and Labrador was down 2,700, due to losses in part-time work. The unemployment rate there rose by 0.7 percentage points to 12.4%. The robust job increases in Ontario and British Columbia were not shared by Quebec and other provinces which saw little change in their employment situation.

In May, 19,000 fewer people were working in business, building and other support services, mostly due to declines in Quebec and Alberta. Employment in accommodation and food services was down by 12,400, the fourth decline in the last five months. Employment in this industry has been trending down since May 2018, decreasing by 63,000 (-5.0%) over the year.

The Unknown

The number of self-employed workers rose by 62,000 in May. Compared with 12 months earlier, the number of self-employed rose by 93,000 (+3.3%)  The self-employed category includes independent contractors and freelancers. 

It is unclear why approximately two-thirds of the increase in self-employed workers over the last year took place in May, or whether this rate of growth will continue. Yet if the number of Canadians that opt out of traditional employment situations continues to increase rapidly, it will strain efforts of employers who are attempting to recruit and retain full-time talent at a time of record-low unemployment. The coming months should provide clarity as to whether the rapid increase in self-employed workers in May was an aberration or an indicator of a significant shift in the nature of the Canadian workforce.

The Labor Department released its May jobs report, which shows that U.S. employers added 75,000 jobs in May, well below analyst expectations. The unemployment rate remained at 3.6% last month. Year-over-year wage growth decreased to 3.1%, which is still well ahead of the rate of inflation. U.S. employers have added to payrolls for 104 straight months, extending the longest continuous jobs expansion on record.

The Numbers

75,000: The economy added 75,000 jobs in May.

3.6%: The unemployment remained at 3.6%.

3.1%: Wages increased at a rate of 3.1% over the last year.

The Good

The 75,000 new jobs added to the economy continued the longest job expansion in U.S. history.  The unemployment rate remained at 3.6%, close to a historic low. The year-over-year earnings increase was a solid 3.1%. The annual wage increase one year ago was just 2.7%.

The broadest measure of unemployment—which includes those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full-time—fell to 7.1% in May from 7.3% in April. This rate, known as the U-6, has descended since peaking at 8.1% at the start of 2019. While hiring appears to be slowing down, the nation still enjoys an economic environment characterized by low unemployment and rising wages. The most recent report on the number of those applying for unemployment benefits showed that new jobless claims are close to a post-recession low.

The Bad

The addition of just 75,000 jobs in May was coupled with revised employment data for April and March which showed a decrease of 75,000 in the numbers previously reported. The fall off in hiring in May is part of a larger trend which indicates that labor market growth is slowing down since last year. In the first five months of 2019, the economy added an average of 164,000 jobs, down from an average gain of 223,000 for all of 2018. The share of Americans working or looking for a job was unchanged, remaining at 62.8%.

Manufacturers added only 3,000 workers to their payrolls, continuing a streak of weak hiring numbers for this sector. The retail sector, which is challenged by the rise of e-commerce, lost jobs for the fourth month in a row. The retail sector has lost 50,000 jobs since January. The proportion of prime working-age adults, those 25 to 54, who are working rose sharply in 2018. This proportion appears to be leveling off or even decreasing. It was 79.9% in February and 79.7% in May. 

Some analysts point to tensions and uncertainty over trade as a possible cause of disappointing jobs report:

“It definitely looks like we’ve downshifted in the pace of job growth,” said Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. “Overall it’s a disheartening report particularly since you may have some trade effects there, but a lot of the trade tensions escalated” since the reference period for the Labor Department’s surveys in the middle of the month.”

The Unknown

With possible tariffs on Mexican goods and continuing trade tension with China, many U.S. businesses are compelled to make hiring decisions without much certainty over future costs, both in the near and long term. In part fueled by trade conditions, there appears to be increasing pessimism over the potential for economic growth for the remainder of the year:

“Over all, the economy is on a fragile footing,” said Lindsey Piegza, chief economist at the investment bank Stifel. “We’re still talking about solid growth at the start of the year but that’s in the rearview mirror. The name of the game is uncertainty.”