Category: Talent & Market Insights

The Australia Bureau of Statistics released its May Labour Force Key Statistics.  Australian employment rose, but the growth was slower than expected. Job gains were led by increases in part-time work while the jobless rate ticked down to its lowest since November at 5.4 per cent.

The Numbers

12,000: The Australian economy added 12,000 jobs in May.
5.4%: The Australian unemployment rate decreased to 5.4 per cent.
65.5%: Labour force participation decreased to 65.5 per cent.
+6: According to the NAB, the business confidence index fell to +6 index points.

Upside

There was a net job gain of 12,000 in May which continues the trend of monthly job growth. Australia’s annual job growth of about 3 percent was nearly double the U.S. rate of job creation of 1.6 percent. Since May 2017, full-time employment has increased by 178,800, and part-time employment has increased by 125,100.

The labour force participation rate decreased in May but is still near historic highs with more women and senior citizens entering the workforce.  In seasonally adjusted terms, the largest increase in employment was in Victoria (up 22,100), followed by Queensland (up 5,000), and New South Wales (up 2,800). The only increase in the seasonally adjusted unemployment rate was in Tasmania (up 0.5 per cent).

Downside

The job gains in May still fell 6,000 short of the 18,000 expected increase. The net increase was only possible due to a surge in part-time jobs that offset a decrease in full-time employment. The business confidence index fell to +6 – the level of its long-term average. Wages continue to grow at a slow pace which is causing concern about the possible negative impact this will have on the economy as a whole.

The Unknown

The Fair Work Commission raised the minimum wage by 2.4 per cent to $672.70 a week. This will mean an extra $15.80 per week for the 1.8 million workers who are paid the minimum wage in Australia. The increase takes effect on July 1 and equates to a minimum hourly rate of $17.70. It is unclear what the impact of this increase will be on the unemployment rate or the stagnation in wage increases.

The Labor Department released its May Jobs Report showing 223,000 jobs added to the U.S. economy, which continues the longest stretch of job growth in the nation’s history and brings the unemployment rate to 3.8 percent.

The Numbers

223,000: The economy added 223,000 jobs in May.
3.8%: The unemployment rate dropped to 3.8 percent.
2.7%: Wages increased 2.7 percent over the last year.

The Good

The 223,000 jobs added in May surpassed analyst expectations and lowered the unemployment rate to 3.8 percent. Employment grew in industries including healthcare, retail and construction. The Labor Department revised its figures to show a show a net increase of 15,000 in March and April.
There was good news for Americans without a high school diploma. The unemployment rate for workers 25-years-old and older with less than a high-school diploma dropped to 5.4 percent, down from 6.2 percent at the same time last year and a large decrease from the 8.5 percent rate in September 2016. The unemployment rate for college graduates is holding steady at 2.0 percent.

The Bad

Employers face significant challenges in a market with increasing job openings and very low unemployment. More workers are quitting their jobs, which increases the pressure on employers to take immediate action to both attract and retain talent.
The employment gains made by those with less than a high school diploma may increase the difficulty of staffing seasonal summer jobs, an issue already caused by overall low unemployment. The scarcity of workers for seasonal businesses could lead to higher costs for business owners who may pass the increased costs onto consumers.

The Unknown

There is uncertainty over the repercussions of the recently imposed tariffs on key U.S. allies. The White House announced that the EU, Canada and Mexico will face 25 percent tariffs on steel and 10 percent on aluminum. Retaliation could lead to increased prices and unstable supplies of key commodities, which may stall or reverse the job gains made in recent years.

The Labor Department released its April jobs report with 164,000 jobs added to the U.S. economy, continuing the longest stretch of job growth in the nation’s history and bringing the unemployment rate to 3.9 percent – the lowest level since 1970.

The Numbers

164,000: The economy added 164,000 jobs in April.
3.9%: The unemployment rate dropped to 3.9 percent.
2.6%: Wages increased 2.6 percent over the last year.

The Good

The 164,000 jobs added this month may have been less than some analysts projected, according to the Wall Street Journal, but April’s job growth brought the unemployment rate down to 3.9 percent after it held steady for six months. Revised figures show employers added 30,000 more jobs in February and March than previously estimated, bringing the monthly pace of hiring this year to 200,000, compared to the 2017 average of 182,000 jobs per month.

The strongest gains continue to be in the professional and business services sector, which added 54,000 jobs in April. With that, the total number of jobs added in this sector in the last year rose to more than half of a million. Manufacturing also continued to grow with 245,000 jobs added in the last year. The healthcare industry also continued its consistent growth, adding 24,000 jobs in April, and 305,000 in the last year.
Wage growth continued, but at a modest rate of 2.6 percent over last year. While many workers would like to see higher gains, the modest growth is appealing to investors and eases fears about the economy overheating.

The Bad

Unlike the areas of the economy which showed healthy job increases in April, some industries saw little change over the last month – including construction, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality and government work.
The U.S. workforce shed 410,000 people in April, bringing the total of those out of the workforce to 95.7 million. The tightening labor market brings significant challenges to employers, including potential wage pressure and a diminishing pool of available talent, according to the Washington Post.

The Unknown

Uncertainty over the imposition of tariffs on China and other countries makes long-term planning and growth projections very challenging, the New York Times reports. The possible shift in the price of raw materials resulting from a trade war would likely have the greatest impact on the manufacturing sector.

The Australia Bureau of Statistics released its March Labour Force Key Statistics showing slower job growth compared to the past year.

The Numbers

4,900: The Australian economy added 4,900 jobs in March.
5.5%: The Australian unemployment rate remained steady at 5.5 per cent.
65.5%: Labour force participation decreased 0.1 per cent to 65.5 per cent.
+7: According to the NAB, the business confidence index fell two points to +7 index points.

Upside

The 4,900 jobs added to the Australian economy in March brings employment growth over the past year to 367,100, as reported by Business Insider. Employment remains at a record high 12.48 million. The largest increase in employment was in Victoria, followed by Tasmania and Western Australia. Since March 2017, full-time employment has increased by 226,900 persons, and part-time employment has increased by 140,200 persons.

Additionally, the unemployment rate initially reported as 5.6 percent in February was adjusted down to 5.5 per cent. That rate held steady in March. According to Marketwatch, the country is still not yet at full employment.

Downside

The 4,900 jobs created in March fell well below economists’ expectations. This is a sign that the strong run of monthly job increases could be slowing down. Full-time employment actually decreased by nearly 20,000 in March, but an increase of nearly 25,000 jobs created the net increase in employment. There was also a small decrease in the labour participation rate.

The business confidence rate also dropped two points in March to +7. This is still slightly higher than the historical average, but it has fallen four points in just two months.

Unknown

The significant slowing of job creation in March may mark the end of a period of strong sustained job growth. Decelerated job growth has implications for the broader Australian economy, though economists still debate what could happen. While there is still room to grow in Australia’s economy, some economists believe the growth could slow.

Tom Kennedy of JP Morgan notes, “Much of the positivity RBA officials have had on the labour market of late has come from the fact that employment growth boomed last year, with raw job creation making it easy to paper over the various headwinds facing the consumer, such as benign wages growth and high levels of household indebtedness.

However, we had previously flagged the surge in employment growth and participation as being correlated phenomena. While early days it appears this view is broadly tracking, and we retain our forecast for participation to stabilise and employment growth to moderate in 2018.”

The Labor Department released its March jobs report with slower than expected job growth, but the 103,000 jobs added to the U.S. economy extended the longest stretch of expansion to 90 months.

The Numbers

 103,000: The economy added 103,000 jobs in March.

4.1%: The unemployment rate remained steady at 4.1 percent.
2.7%: Wages increased 2.7 percent over the last year.

The Good

After February’s strong jobs numbers, the 103,000 jobs added to the economy seems disappointing. However, according to MarketWatch, the U.S. still added an average of 202,000 jobs each month in the first quarter of 2017. This is still strong growth.
Additionally, the unemployment rate remained at 4.1 percent. Though economists had expected that to fall to 4.0 percent in March, the current rate is still the lowest since 2000.
The 2.7 percent wage growth is largely a positive. It is still moderate – slightly higher than the 2.5 percent seen through most of 2017, but low enough to prevent fears of inflation, according to the Wall Street Journal. However, many workers would like to see this number increase.

The Bad

This is the weakest job growth the economy has seen in six months. In September 2017 after the destruction of hurricanes Harvey and Irma, the economy only added 14,000 jobs, though it was initially reported as a loss. The previous low was March 2017, when the economy added what was revised to only 73,000 jobs. Additionally, retail saw job losses in March after significant gains in February.

The Unknown

According to the New York Times, it still unclear what impact escalating trade tensions with China will have on the U.S. economy, particularly the manufacturing sector. Manufacturing has seen strong job gains over the past year, including 22,000 jobs in March. However, a trade war with China could impact that growth.

The Australian Bureau of Statistics released its February Labour Force Key Statistics showing another month of strong job growth, but an unemployment rate that increased due to an increase in labour force participation.

The Numbers

17,500: The Australian economy added 17,500 jobs in February.
5.6%: The Australian unemployment rate increased .1 percent to 5.6 percent.
65.7%: Labour force participation rose .1 percent to 65.7 percent.
+9: According to the NAB, the business confidence index fell two points to +9 index points.

Upside

The 17,500 jobs added to the Australian economy marks the 17th consecutive month of job growth according to Business Insider. This brings employment to 12.48 million, which is the highest ever recorded. The largest increase in employment was in New South Wales.

While economists had expected the unemployment rate to remain at 5.5 percent in February, the increase to 5.6 percent can be attributed to the increase in labour force participation, which shows that the Australian economy is strong enough to pull people to join or reenter the workforce.

Downside

While the numbers were mostly strong, there is still some room for improvement. According to MarketWatch, underemployment is still an issue. Additionally, despite the net growth in employment, the economy actually shed 47,400 part-time jobs. Employment in Victoria saw a decrease of 11,300, though that was offset by increases elsewhere.

The business confidence rate also fell two points in February to +9. However, the NAB attributes this to “turbulence in international financial markets in early February,” and notes that the number remains above the average of +6. On a brighter note, the NAB reports that the business conditions index actually increased three points to a record high +21.

The Unknown

Economists debate how much room there is left to grow in Australia’s economy. The issues of underemployment and the fact that the size of the labour force is growing faster than employment point to an economy with plenty of room for growth. Economists suggest that the unemployment rate will need to fall below 5 percent before workers begin to see significant wage gains.

The Labor Department released the February jobs report with higher than expected job gains but slowing wage growth.

The Numbers

313,000: The U.S. added 313,000 jobs in February.

4.1%: The unemployment rate remained steady at 4.1 percent.

2.6%: Wages rose 2.6 percent over the past year.

The Good

February’s jobs report has a lot of good news. The 313,000 jobs added to the economy beat economists’ expectations. The number also marks the fastest pace of job growth in a year and a half according to the Wall Street Journal. Hiring was also spread across industries. Retail, which struggled at the end of 2017, gained 50,000 jobs in February. Professional and business services and manufacturing also saw strong job growth.
The 4.1 percent unemployment has remained steady for the past four months, and it’s the lowest unemployment rate in 17 years. The labor market participation rate ticked up to 63 percent in February, which is its largest jump in three years according to CNN. This shows that economy is still strong enough to pull in sidelined workers, without increasing the unemployment rate.

The Bad

The 2.6 percent wage growth in February can either be good or bad news depending on who you’re asking. Wage growth did slow from January, which is disappointing for workers and more in line with the sluggish wage growth that’s remained consistent throughout the recovery from the Great Recession. However, according to the New York Times, the lower wage growth quiets concerns about inflation.

The Unknown

The biggest question right now is how much room for growth is left in the economy. Despite the strong numbers in January’s jobs report, investors were concerned about inflation, which resulted in large stock market losses. However, February’s report indicates that there is still plenty of room to grow.
“Over the last 2 months, the job market has absorbed 1.3 million new entrants into the labor force, allowing the unemployment rate to stay at 4.1% – a remarkable testament to the underlying strength in this economy,” David Donabedian, chief investment officer of CIBC Atlantic Trust told the Wall Street Journal.

The Numbers:

2.1 million: The economy added 2.1 million jobs in 2017
4.1%: The unemployment rate fell from 4.8 percent to 4.1 percent in 2017
2.5%: Hourly wages increased 2.5 percent in 2017

The Good

The U.S. economy saw continued growth in 2017, marking 87 straight months of growth, according to the New York Times. The 2.1 million jobs added in 2017 brought the unemployment rate down to a low that the U.S. hasn’t seen in 17 years.
The Washington Post reports that there is now nearly one job opening for every unemployed person in the U.S., with 6 million vacancies and 6.6 million unemployed people. While this is good news for anyone who is looking for a job, employers are struggling to fill open positions. Economists expect the job growth to continue into 2018, causing the unemployment rate to continue to fall.

The Bad

While the economy is still growing, that growth is slowing. According to CNN, the economy added nearly 3 million jobs in 2014, 2.7 million in 2015 and 2.2 million in 2016. The two weakest months for hiring in 2017 were March and September. However, economists attribute that to weather. March was cold and snowy, and hurricanes Harvey and Irma impacted hiring in September.
Retail hiring was another weak point in 2017. The retail industry shed 67,000 jobs. More than 20,000 were lost in December alone. The rise of e-commerce hit retails stores particularly hard in 2017.
Additionally, despite the continued job growth and falling unemployment, wage growth has remained sluggish. Economists have offered a variety of explanations; however, many expect increased wage growth to start soon. Some industries, particularly the finance and leisure and hospitality sectors are already seeing wage growth that is significantly higher than the national average.

Looking Toward 2018

Looking forward to 2018, economists expect more good news. According to the Wall Street Journal Economic Forecasting Survey, economists expect the unemployment rate to fall to 3.9 percent in June and 3.8 percent by December. They also expect the economy to add slightly fewer jobs than 2017.
As far as any impact from the tax bill, economists are skeptical it will have any immediate effect on either job or wage growth, according to Business Insider. However, according to the New York Times, 2018 could see more wage growth, as industries where they labor supply is tighter are seeing wages rise.
Review the monthly 2017 jobs reports to see how things changed month to month, and check back each month for our analysis of the 2018 jobs reports.
March 2017 Jobs Report
April 2017 Jobs Report
May 2017 Jobs Report
June 2017 Jobs Report
July 2017 Jobs Report
August 2017 Jobs Report
September 2017 Jobs Report
October 2017 Jobs Report
November 2017 Jobs Report
December 2017 Jobs Report

The Global Unemployment Report – Q3 2017

PeopleScout partnered with HRO Today to produce a quarterly summary of international unemployment metrics for key countries in North America, Latin America, EMEA and APAC, including highlighting the countries with the most highly skilled workers. This issue of the report focuses on Q3 2017.
Click below to access the white paper

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The Labor Department released its December Jobs report with lower than expected job growth and an unemployment rate that remains at a 17-year low.

The Numbers

148,000: The economy added 148,000 jobs in December

4.1%: The unemployment rate remained at 4.1 percent

2.5%: Wages grew 2.5 percent over the past year

The Good

The 148,000 jobs added to the economy in December marks the 87th straight month of growth, the longest on record, according to Business Insider. The 4.1 percent unemployment rate also marks the third straight month at the 17-year low. Both numbers mark the end of another strong year of growth for the U.S. economy. Though the job growth fell below economists’ expectations, the number is still high enough to handle the number of people entering the job market and chip away at the unemployment rate, according to the Wall Street Journal.

The Bad

The biggest weight on December’s jobs report is the loss of retail jobs. Despite the growth in other sectors, the retail trade lost more than 20,000 jobs in December, most of those losses were in general merchandise stores. The New York Times reports that the rise of e-commerce hit especially hard this December. However, the retail sector has shed 67,000 jobs throughout 2017.

The Unknown

The biggest question that remains at the end of 2017 is when the sluggish 2.5 percent wage growth will begin to increase. According to the Wall Street Journal, some employers are feeling pressure to increase wages to retain employees. In 2017, the financial, leisure and hospitality and transportation and warehousing industries saw significant wage growth. While manufacturing has seen strong job growth, wage growth has been slow in the industry, falling short of the average at just 1.6 percent. According to one economist quoted by the Wall Street Journal, wage growth will be the indicator to watch in 2018.