Category: Talent & Market Insights

Canada’s unemployment rate fell to 5.6 per cent, the lowest level since 1976. Canada added 94,100 net jobs for its largest monthly increase since March 2012, Statistics Canada said in its most recent labour force survey. But even with healthy job growth, wage gains appear to be slowing. Both hourly and weekly wage growth rates have been dropping since May and are below the rate of inflation.

The Numbers

94,100: The economy gained 94,100 jobs in November.

5.6%: The unemployment rate fell to 5.6 per cent.

1.5%: Weekly wage increases are 1.5 per cent over the last year. This is a 0.3 per cent decrease from October’s wage growth figure.

The Good

The 94,100 jobs gained in November were fueled by 89,900 new full-time positions and 78,600 employee jobs in the private sector. Employment among the core age group (those aged 25 to 54) was up 49,000 in November, the result of increases for both women (+32,000) and men (+17,000). The unemployment rate fell by 0.4 percentage points to 4.6 per cent for core-aged women, and by 0.2 percentage points to 4.7 per cent for core-aged men. In the 12 months to November, employment within this age group rose by 208,000 (+1.7 per cent), largely the result of gains for women (+129,000). In the 12 months leading up to November, employment grew by 219,000 or 1.2 per cent.
Employment was up in six provinces including Quebec with 26,000; Alberta with 24,000; Ontario with 20,000; British Columbia with 16,000; 5,500 in Saskatchewan and 2,600 in Manitoba. On a year-over-year basis, the number of private sector employees rose by 146,000 (+1.2 per cent), while the number of public sector employees grew by 48,000 (+1.3 per cent).

The Bad

Average weekly wage growth fell to just 1.5 per cent and hourly wage growth slowed as well as the CTV reports:
“Year-over-year average hourly wage growth for permanent employees continued its decline in November to 1.46 per cent — its lowest reading since July 2017.
‘There’s no question that the headline job growth is gangbusters strong,’ said Frances Donald, head of macroeconomic strategy at Manulife Asset Management
‘I would caution us against celebrating too quickly, however, because wage growth is decelerating sharply.’”
Experts have been expecting wage growth to pick up its pace, thanks to the tightened labour market. But the opposite has been happening — wage growth has dropped every month since its May peak of 3.9 per cent and now sits well below inflation.
Employment declined in information, culture and recreation (-10,000 or -1.3 per cent), continuing the downward trend that started in August. The decrease was driven by Ontario. Compared with 12 months earlier, employment in this industry was down by 25,000 (-3.2 per cent) at the national level.

The Unknown

The Financial Times reports that the digital economy has created a demand for 216,000 more tech workers, according to a new study. However, it is unclear whether there are enough available workers in Canada to meet this demand:
“Blockchain, artificial intelligence, 5G mobile networks, 3D printing and virtual reality are creating a need for digital skills that will see a demand for an estimated 216,000 additional technology workers by 2021, according to a new report.
A study by the Information and Communications Technology Council (ICTC), found that employment of information and communications technology professionals outpaced the economy last year six-to-one.
‘What’s happening now is we are seeing fast-paced industries go from low growth to high growth,’ said Namir Anani, president and chief executive of ICTC.
‘We have to look at how do we reposition the workforce rapidly through short-duration training to provide pathways and mobility to get into fast-growth sectors of the Canadian economy that are increasingly becoming digital.’
As more industries recognize the importance of a digital strategy, competition for tech workers has increased. ICTC highlighted transportation, retail, healthcare, finance and manufacturing as sectors where demand is ramping up.
‘The environment is changing fast and every sector is seeing its own disruption,’ Anani said.
‘We have to reflect as a country on how do we leverage (disruption) and what are the transitional strategies we have to build to move some of the displaced workers from low-growth to high-growth areas of the economy.’
There was a five per cent increase in employment for digitally skilled workers in 2017, the highest growth in 10 years, according to ICTC’s report. Meanwhile, 60 per cent of Canada’s tech workers were now spread across non-tech sectors.
Not only are Canadian companies struggling to find enough digitally skilled workers to fill positions in the present, but the largest group of tech workers is already approaching retirement, with 13.1 per cent being between the ages of 55 to 64. ICTC’s research was conducted with the support of Microsoft Canada.
‘The issue is really about supply and demand. The demand is increasing as more sectors are adopting digital technologies and the supply of talent and skills is a challenge,’ said Navdeep Bains, the federal Minister of Innovation, Science and Economic Development.
‘When we put forward our Innovation and Skills Plan, by far this was the number one issue — around training and people having the right skills to succeed today and for the job tomorrow.’”

The Labor Department released its November Jobs Report which shows 155,000 jobs added to the U.S. economy. The pace of hiring slowed while the unemployment rate remained at 3.7 percent, which is the lowest point since 1969. The participation rate also remained unchanged at 62.9 percent. U.S. employers have added to payrolls for 98 straight months, extending the longest continuous jobs expansion on record.

The Numbers

155,000: The economy added 155,000 jobs in November.

3.7%: The unemployment remained to 3.7 percent.

3.1%: Wages increased 3.1 percent over the last year.

The Good

The 155,000 jobs added to the economy in November adds to an unprecedented run of continuous growth. 2018 is shaping up to be a year of impressive expansion given the 12 month job growth in key sectors of the American economy: Healthcare employment has increased by 328,000; Manufacturing has grown by 288,000 and Business and Professional Services has expanded by 561,000 jobs.
The annual wage gain is also a sign that the economy is continuing to grow, but at a more measured pace than earlier in the year. As the New York Times reported:
“It’s obviously an economy that is well in expansion mode but that is coming off the boil after a strong second and third quarter,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “So the state of the job market is good. It’s just that the pace of job creation is slowing a little bit.”
Yearly wage growth remained at 3.1 percent for the second month in a row, a level not seen since the recession. “If you have solid wage growth while productivity is improving, that is the best of both worlds,” Mr. Donabedian said.

The Bad

The 155,000 jobs added in November fell below analyst expectations. The slowing pace of hiring is perceived to be caused by the inability of employers to find the right workers to fill their open positions. This appears to be the case in many parts of the economy, including those with some of the highest job gains this year such as healthcare. The Wall Street Journal reported on one such business in the high-demand area of elder care:
“The modest job-growth slowdown could be a sign of slightly softer demand for goods and services by consumers. For some companies, hiring also might be slowing because they can’t find the workers they need because unemployment is so low.”
That was the case for Home Instead Senior Care, an Omaha, Neb.-based in-home care provider, said its Chief Executive Jeff Huber. The company employs about 65,000 U.S. caregivers through its franchises, a 23 percent increase from three years ago.
“We could grow even more robustly if the labor market weren’t so tight,” Mr. Huber said. “The competitive job market is really restricting on our growth. There’s just tremendous demand for caregivers.”
Labor costs for the company, including wages and benefits, have risen about 20 percent annually in recent years, he said, but revenue is also growing robustly. The company is offering more training and flexible schedules to attract and retain employees, and recruiting older workers who have finished careers but aren’t ready to fully retire. A third of caregivers are older than 60, Mr. Huber said.

The Unknown

The recent announcement that General Motors would be laying off nearly 14,000 workers raises the question of whether these newly available workers would have the skills required to find new work, even in the current labor market in which job seekers are highly favored. This point was underscored by General Motors CEO Mary Barra:
“As Barra announced the cutbacks, she also said GM plans to acquire “skillsets of the future” by hiring in software development, battery and fuel cell technology and autonomous vehicle development,” The Detroit News reported. “You will see us having new employees join the company as others are leaving,” she said. “We still need many technical resources across the company.”

The Australian Bureau of Statistics released its October jobs numbers showing an unemployment rate that remained steady at 5.0 per cent as nearly 33,000 jobs were added and the participation rate rose to 65.6 per cent.

The Numbers

32,800: The Australian economy added 32,800 jobs in October.
5.0%: The Australian unemployment remained at 5.0 per cent.
65.6%: Labour force participation rose to 65.6 per cent.
+4: According to the NAB, the business confidence index fell to +4 index points.

Upside

Hourly pay rates in Australia rose by 0.6 per cent in the last quarter which met analyst expectations. Wages have now increased 2.3 per cent over the past 12 months, which is the highest annual growth rate in three years. Public-sector hourly rates of pay rose by 0.6 per cent in the quarter and 2.5 per cent over the year, while private-sector workers received a 0.5 per cent increase in the quarter and 2.1 per cent over the year.

Unemployment remained steady at 5.0 per cent which was below analyst expectations. The unchanged rate is good news since the labour force participation rose during the month. When more people join the labour pool, unemployment rates can go up if those who have just started to participate are not working yet. Full-time employment was up 42,300 following the addition of 24,600 in September.

In seasonally adjusted terms, the largest increase in employment was in New South Wales (up 16,300), followed by South Australia (up 7,700).

Downside

The largest decreases in employment were in Victoria (down 3,500 persons), followed by Queensland (down 3,200 persons). Part-time employment decreased by 9,500 jobs. The Business Confidence Index fell to +4.0. The wage increases, though they are the highest in three years, are relatively lackluster. As ABC reports:
“While jobs growth has been rolling at 2.5 per cent over the year, it has yet to ignite wages growth.

Capital Economics analyst Marcel Thieliant said wage growth is still unlikely to pick up even if unemployment falls below 5 per cent in coming months.
‘The ageing and higher education levels of the workforce coupled with improved job-matching via the internet suggest that the natural unemployment rate may now be as low as 4 per cent,’ Mr. Thieliant said.

‘What’s more, the unemployment rate is not telling the whole story. The seasonally adjusted underemployment rate remained at 8.3 per cent, underlining that there’s still a large number of employees that would like to work additional hours.’”

Unknown

Apprenticeships received a boost when the Australian government recently announced an investment of AUS$60 million for a trial wage subsidy as an incentive for employers in regional and rural communities to employ more apprentices. Starting January 1, 2019, the new subsidy under the Australian Apprenticeships Incentives Program will support eligible new Australian Apprentices in areas such as plumbing, mechanical, electrical, painting trades and hairdressing, which are currently experiencing skills shortages. Whether these wage incentives attract sufficient apprentices and employers willing to hire them to address the ongoing skills gap remains to be seen.

Australia’s largest national youth survey found the following:

“Taking on an apprenticeship leads to the highest level of wellbeing among young Australians out of all post-school pathways, according to the results of the nation’s largest youth survey to be released today.

The Skillsroad 2018 Youth Census gained more than 30,000 responses nationally from youth aged 15-24, and found that those undertaking an apprenticeship, traineeship, or working in some capacity were happier overall and experienced higher levels of ‘meaning,’ ‘resilience’ and ‘optimism’ than all other pathways after school.

Additionally, that survey participants who were working whilst in secondary school, and contributing financially to their housing situation (even if living at home with parents), reported higher levels of well-being than those that weren’t.”

This month’s UK Labour Market Report, which covers July through September, brings to mind a gathering of friends sitting around the dinner table when a long-anticipated guest bursts through the door and breathlessly announces, “I have good news and bad news, which do you want first?” This month’s report contains elements that are unquestionably good and bad, but there are some items where interpretation varies.

First, the objectively good news: The number of employed people rose by 23,000, bringing the employment total to a new high of 32.41 million, which is 350,000 more than a year earlier. And the bad news? The UK unemployment rate has risen to 4.1 per cent, up from a 43-year low of 4.0 per cent. In the last quarter, 21,000 UK workers lost their jobs.

Below, we focus on factors that are up for interpretation.

Wages

The growth in UK wages accelerated to a near 10-year high. Average nominal earnings (wages excluding bonuses) rose 3.2 per cent from the same quarter a year earlier. This is the largest increase since December 2008 and higher than the expected 3.1 per cent predicted in a Bloomberg survey.

The rise in wages is continuing to outpace prices, which is a relief for those impacted by the inflation surge following the Brexit vote. While the rate of pay growth may be greeted positively by workers, it is a concern for employers who are feeling the pressure to raise wages to retain and attract talent in a tight market.

Job Vacancies

Job vacancies hit a record high of 845,000, which is welcome news for job seekers who find themselves “in the driver’s seat” given the high demand for workers. A large number of job vacancies can be perceived as a sign of a robust economy with many enterprises seeking to grow.

However, this high number of open positions can take a toll on both employers who have to ensure profitability with a smaller number of workers and the workers who may be required to take on extra responsibilities. Given the number of opportunities available, workers may feel the lure of quitting for a more lucrative position when they carry a burdensome workload.

EU Nationals as Part of the UK Workforce

There were 132,000 fewer EU nationals working in the UK than a year earlier, bringing the total to 2.25 million. This was the largest annual drop in the number of workers from Europe since the Office for National Statistics began keeping track in 1997.

The fall in EU workers was due to a decline of 154,000 workers from the eight eastern and central European accession countries that joined the EU in 2004. This was offset by an increase of about 23,000 workers from other EU countries. The Financial Times reports:

“Stephen Clarke, senior economic analyst at the Resolution Foundation think-tank, said that the fall in EU migrant workers ‘shows that Britain’s labour market is already changing ahead of its exit from the EU.’

‘Firms who employ a large share of migrant workers need to think now about adjusting to a lower migration environment, in terms of the workers they employ, what they produce and how they operate,’ he said.”

This may be music to the ears of those who hoped that Brexit would bring more job opportunities to UK nationals. For others, the decline in EU workers exacerbates an already difficult skills shortage and increases the pressure to raise wages to attract home-grown talent.

If we check back in with the gathering of friends sitting down to dinner, some may have heard mostly good news and some mostly bad, but they can all agree that there is much to digest as the year draws to a close and Brexit looms ever closer.

Canada’s unemployment rate has moved back down to a four-decade low of 5.8 per cent, but even in a tight job market where employers are having a hard time finding workers, wage growth is slowing. The nation added 11,200 net new jobs in October, including a gain of 33,900 full-time positions, Statistics Canada reported in its latest labour force survey. The agency said the jobless rate moved down from the 5.9 per cent level in September, mainly because fewer people searched for work.

The Numbers

11,200: The economy gained 11,200 jobs in October.
5.8%: The unemployment rate fell to 5.8 per cent.
1.8%: Weekly wages decreased to  1.8 per cent over the last year.

The Good

Employment among people in the core-aged group (25 to 54) rose by 31,000 in October. On a year-over-year basis, employment for core-aged workers increased by 169,000 (+1.4 per cent) with gains equally distributed between men and women. Job gains were not limited to the core age group. The number of workers aged 55 and over rose by 19,000 in October, which is the result of more employed women in this age category. The unemployment rate for all workers aged 55 and over fell by 0.3 percentage points to 4.9 per cent. Compared with October 2017, the number of workers aged 55 and over increased by 72,000 (+1.8 per cent).
More Canadians were employed in business, building and other support services; wholesale and retail trade; and healthcare and social assistance. Full-time employment rose by nearly 34,000. Over the last year, the number of employed people in Canada grew by206,000 or 1.1 per cent, with the most of the gain coming from full-time work (+173,000).

The Bad

Year-over-year, average weekly wage growth fell to just 1.8 per cent and hourly wage growth slowed last month to 2.19 per cent for the lowest reading level September 2017. Experts have predicted wage growth to rise along with a tightened labour market, but average hourly wage growth has dropped every month since May when it was 3.94 per cent.
The loss of over 22,000 part-time jobs contributed to the lackluster job gains in October. The unemployment rate fell only because fewer people were in the labour force which decreased by 18,200. With the exception of Saskatchewan which gained 2,500 jobs in October, employment was essentially flat in every other province.
There were 17,000 fewer Canadians working in “other services” in October, the first notable decline in six months. “Other services” includes services such as those related to civic and professional organizations; repair and maintenance; and private households. Employment in finance, insurance, real estate, rental and leasing declined by 15,000 in October, offsetting an increase the month before. On a year-over-year basis, employment in the industry was essentially unchanged.

The Unknown

The tax reforms in the U.S. may seriously impact the Canadian economy in the near future according to a recent PwC study as reported in BNN Bloomberg:
“Our analysis suggests that the U.S. tax reform has eliminated one of Canada’s main competitive advantages. We are of the view that this loss will have a significant negative impact on capital-intensive sectors in Canada,” according to the report, which was produced for the Business Council of Canada. “All else being equal, these sectors as a whole would likely face a significant shift in investments from Canada to the U.S. over the next 10 years.”
The wide-ranging tax reform bill cut the U.S. corporate tax rate to 21 per cent from 35 per cent and allows for companies to deduct the full cost of capital spending from their tax bills.
PwC said $85-billion in GDP – about 4.9 per cent of total output – and 635,000 jobs are at risk due to the U.S. leapfrogging Canada on the competitive front. It forecasts the chemical, machinery manufacturing and plastics industries would be most at risk. On a provincial basis, PwC said Ontario has the most on the line, accounting for nearly one out of every three dollars identified at risk.”

The Labor Department released its October jobs report which shows 250,000 jobs added to the U.S. economy. The pace of hiring was strong, and the unemployment rate remained at 3.7 percent, the lowest point since 1969. The unemployment rate held steady because the number of people working or looking for a job increased by 711,000, nudging the labor force participation rate up to 62.9 percent, from 62.7 percent a month earlier. U.S. employers have added to payrolls for 97 straight months, extending the longest continuous jobs expansion on record.


The Numbers

250,000: The economy added 250,000 jobs in October.
3.7%: The unemployment remained to 3.7 percent.
3.1%: Wages increased 3.1 percent over the last year.

The Good

Wage growth climbed 3.1 percent from one year ago, on an hourly basis, exceeding 3 percent for the first time since the recession. On a weekly basis, wages grew at an even stronger rate at 3.4 percent. The economy has added 2.1 million jobs so far in 2018, which puts it on track to be the third best year for job growth since the recession. This year is 89,000 jobs behind the pace of 2015 and 322,000 jobs behind the pace of 2014. The overall increase in those participating in the labor pool is an indicator of the continuing strength of the job market.
For those ages 25 to 54, 82.3 percent are participating in the labor force and 79.7 percent have jobs. Both figures are now at their highest levels since the recession and its immediate aftermath. The biggest sectors for job growth continued to be professional services and health care, and the construction and manufacturing industries have also had solid gains over the last year.

The Bad

Not everyone is reaping the same benefits from the strong job market. The unemployment rate for workers with high school education or less climbed in October. Workers without a high school degree face triple the unemployment rate of those who finished college. Education level is not the only determining factor, as Bloomberg reports:
“Ten years after the Great Recession, 25- to 34-year-old men are lagging in the workforce more than any other age and gender demographics. About 500,000 more would be punching the clock today had their employment rate returned to pre-downturn levels. Many… say they’re in training. Others report disability. All are missing out on a hot labor market and crucial years on the job, ones traditionally filled with the promotions and raises that build the foundation for a career.”

The Unknown

With unemployment at record lows, a critical question is how many of those still on the sitting on the sidelines outside of the labor force can be coaxed back in to fill the current and future open positions. Commenting on the strong job statistics for 25- to 54-year-olds noted above, Neil Irwin in the New York Times writes:
“The proportion of prime-working-age adults — those between 25 and 54 — who were working in October soared to 79.7 percent, up from 79.3 percent in September and easily the highest of this expansion.
Strikingly, though, there is still room to run on this measure compared with the last two economic peaks. That figure was 80.3 percent in January 2007 and 81.9 percent in April 2000.
Does the economy still have the potential to reach those levels, or reach still higher ones? If so, there’s no reason this kind of job growth can’t continue for at least a few more years.
If, on the other hand, some of those who have left the labor force won’t be pulled in no matter what, the economy will be hitting a simple constraint of not having enough workers — all the more so given more stringent policies limiting immigration.
So celebrate the latest jobs numbers, while hoping that this proves to be the middle of a nice boom rather than the beginning of the end.”

The Australia Bureau of Statistics released its September Labour Force Key Statistics showing 5,600 jobs added to the economy and the lowest unemployment rate in more than six years.

The Numbers

5,600: The Australian economy added 5,600 jobs in August.
5.0%: The Australian unemployment rate fell to 5.0 per cent.
65.2%: Labour force participation fell to 65.2 per cent.
+6: According to the NAB, the business confidence index rose to +6 index points.

Upside

Australia’s unemployment rate fell to 5.0 per cent in September, the lowest rate since April 2012. The number of unemployed Australians decreased by 37,200 to 665,800, which is the lowest number since February 2013. The composition of the net change was an increase of 20,300 in full-time employment and a decrease of 14,700 for those in part-time employment.  Since September 2017, full-time employment increased by 217,500 persons, while part-time employment increased by 63,400 persons. The Australian Business Confidence Index rose to +6.0 after falling to a two-year low in August.

In seasonally adjusted terms, the largest increase in employment was in Victoria (up 20,000 persons), followed by Western Australia (up 3,100 persons) and New South Wales (up 2,800 persons).

Downside

The small increase in overall employment was accompanied by a drop in the size of Australia’s labour force which fell from 65.7 per cent in August to 65.4 per cent in September. While this is still a relatively healthy percentage, not all Australians are reaping the benefits of the strong job market. The Sydney Morning Herald reports the following:

“Work in Australia is changing. People are working longer and retiring later. Some do this because they want to, but most do it because they have to.

Work is becoming more casual. For the first time, less than half of all Australians are in full-time work. About one in four are working casually. And as the economy changes, some jobs are disappearing altogether.

One group is bearing the brunt of these changes more than any other – people looking for low-skilled, entry-level jobs. Anglicare Australia’s Jobs Availability Snapshot, released on Thursday, shows what the job market is really like for this group. These are people who are looking for work, but who might not have education or recent work experience.

Our research shows two clear trends. First, low-skilled jobs have been drying up. The government’s own figures show that they have halved as a percentage of job advertisements since 2006. At the same time, more and more jobs are being aimed at people with advanced skills. In the month of our Snapshot, 39 percent of vacancies called for a degree or at least five years’ work experience.

And second, there are just not enough of these jobs for those who need them. We found that for every low-skilled job at the entry level, there are at least four job seekers who might be competing for them.”

Unknown

In its latest World Economic Outlook (WEO), the IMF said the global economy would grow 3.7 per cent this year, the same as in 2017 but down from the 3.9 per cent it was forecasting for 2018 in July. According to the report, Australia will hit 3.2 per cent growth this year before falling to 2.8 per cent next year. In April, the IMF was forecasting 2.9 per cent for Australia next year.

As the Australian Financial News reports “The downward revisions to the 2019 growth forecast for Australia and Korea relative to the April 2018 WEO partially reflect the negative effect of the recently introduced trade measures,” the IMF notes.” Without guaranties of stability with Australia’s major trading partners, the nation’s economic health including the strength of its job market, is far from certain.

The Office for National Statistics released its October Labour Market Bulletin which reports on the three months of June, July and August 2018. The bulletin reports 83,000 jobs were added in those three months with the unemployment rate holding steady at 4.0 per cent. The report shows that average weekly earnings for employees in the UK in nominal terms increased by 3.1 per cent over the last year.

The Numbers

83,000: The economy added 83,000 jobs over the June-August 2018 period.
4.0%: The unemployment rate remained unchanged from the previous bulletin at 4.0 per cent.
3.1%: Wages increased 3.1 per cent over the last year.

The Good

Increased competition for workers pushed wage growth to the highest level in the UK since the recession ten years ago. The UK hasn’t seen 3.1 per cent wage growth since the final three months of 2008, the period when the government had to bail out UK banks following the collapse of Lehman Brothers.

There were 1.36 million unemployed people which is 47,000 fewer than for March to May 2018 and 79,000 fewer than for a year earlier. The unemployment rate at 4.0 per cent has not been lower since February 1975. Of people 16- to 64-years-old, 75.5 per cent were working in the UK, up from 75.1 per cent a year earlier.

For June to August 2018, the unemployment rate for those aged from 16 to 24 years was 10.8 per cent, the lowest youth unemployment rate since comparable records for unemployment by age group began in March to May 1992.

The Bad

There were some signs of weakness in the report, with employment falling slightly from the previous report and for the first time since the autumn of last year. And while wage growth has started to pick up, the Financial Times reports, “The past decade has been the worst for UK real incomes since the mid-19th century and, on current trends, real wages will not double until 2099, the Resolution Foundation noted in a report published on Tuesday. In the period from 1945 to 2002, real wages doubled on average every 29 years.”

Due primarily to concerns over Brexit, Great Britain fell to two places to number 8 on the World Economic Forum’s Global Competitive Index. As The Guardian reports, “Britain has dropped two places to eighth in an influential global competitiveness index, with the risk of Brexit further damaging its international standing…While Britain remains the fourth most competitive economy in Europe behind Germany, Switzerland and the Netherlands, the WEF suggested that it could slip further behind because Brexit stood to damage its attractiveness to international buyers and sellers of goods and services.”

“Brexit … will by definition weaken the United Kingdom’s markets component as integration with the EU is rolled back,” the report said.

“The WEF said Britain had slipped in the 2018 ranking due to a deterioration in domestic labour mobility, which measures the extent to which people move between the different regions of a country to find work.”

The Unknown

Uncertainty over Brexit terms continues with some economists warning of the possibility of no formal deal being agreed to before the exit deadline of March next year. As The Economist notes, “the timetable is slipping, and there is a growing risk of no deal at all. The main reason is that Theresa May, Britain’s prime minister, has rejected a key part of the EU’s draft withdrawal agreement, a planned backstop to ensure that, no matter what happens to a future trade deal between Britain and the EU, there is no hard border with physical customs controls between Northern Ireland and the Irish Republic.

The issue of the Irish border has bedevilled talks from the start. The EU’s guidelines for negotiations, published in March 2017, made it one of three points that needed to be settled in the withdrawal agreement before talks could begin on future trade relations (the other two were settling how much Britain owed for outstanding EU obligations and enshrining the rights of EU citizens in Britain to stay). Last December Mrs. May agreed with the EU that, while the intention was to avoid frontier controls through a comprehensive free-trade deal, a backstop solution was needed to ensure no hard border in any circumstances. The problem is that the two sides have different views on how such a backstop should be legally designed.”

The Labor Department released its September Jobs report which shows 134,000 jobs added to the U.S. economy. U.S. employers have added to payrolls for 96 straight months, extending the longest continuous jobs expansion on record. The unemployment rate remained steady at 3.7 percent, the lowest rate recorded since 1969.


The Numbers

134,000: The economy added 134,000 jobs in September.
3.7%: The unemployment decreased to 3.7 percent.
2.8%: Wages increased 2.8 percent over the last year.

The Good

The unemployment rate in September was the lowest in nearly half a century. Notable job increases were posted in transportation and warehousing, construction, manufacturing and healthcare. These sectors have shown significant growth over the last year: transportation and warehousing has added 174,000 jobs; construction has increased by 315,000 jobs; manufacturing has gained 278,000 jobs; and health care jobs have increased by 302,000.

The Bad

The 134,000 jobs added fell short of Wall Street analysts’ expectations. These job gains are less than half of the 270,000 jobs which were added in August based on revised figures. The comparatively modest job increases may mark the start of a slowdown of job increases.
The year-over-year wage gains fell 0.1 percentage points to 2.8 percent. This slight decrease has temporarily put on hold the start of a continuing trend of increased wages brought about by the tight job market. Slow wage growth is perceived to be the source of the current high rate of voluntary turnover. CNBC reports that compensation appears to be a major reason why workers are quitting their jobs at the highest rate since 2001 and notes that workers voluntarily leaving their jobs are making a smart move when it comes to increasing their income:
Andrew Chamberlain, chief economist at job site Glassdoor [stated] “We’re seeing high worker confidence in their ability to strike out and find a better job opportunity elsewhere,” says Chamberlain. “For many, it’s a smart move, as there’s a clear advantage to increasing your earning potential by switching jobs.”
According to Brian Kropp, vice president at research firm Gartner, the average increase in compensation for a worker who quits their old job for a new one is about 15 percent. “You’re never going to get that 15 percent [increase] by staying at your current job,” he tells CNBC Make It. “That’s just not going to happen.”

The Unknown

Hurricane Florence may have been a factor in the less than stellar job numbers in September as Bloomberg reported:
“The reason for the fuzzy September numbers? Big storms wreak havoc on a region’s workforce. Some people flee the area and businesses close down days before the wind starts to howl. Others, like utility and construction companies and their employees, work overtime preparing for damage, cleaning up and rebuilding. So the latest wages and hours-worked figures were probably skewed by the weather.”
The median forecast in a Bloomberg survey of economist calls for a 2.8 percent gain in average hourly earnings from a year earlier, slightly weaker than the August advance of 2.9 percent – which was the biggest jump since mid-2009. The hurricane effect, however, may render any actual number on worker pay a short-term blip.
“Hurricane Florence is poised to impact not only the pace of job creation in September” but also to “temporarily distort average hourly earnings and the average length of the workweek, as well,” according to Bloomberg economists Carl Riccadonna, Yelena Shulyatyeva and Tim Mahedy.”