Aug 01, 2018

DCR National Temp Wage Index - August 2018

In June 2018, the U.S. economy added 213,000 non-farm jobs, according to the latest employment report by the Bureau of Labor Statistics. This figure is 12.7% lower than May’s addition of 244,000 jobs and is an 11% decrease from June 2017.

Total Non-Farm Monthly Job Growth

Source: BLS

 

The unemployment rate increased by 0.2 points to 4%, with the number of unemployed persons increasing by 499,000 to 6.6 million. Experts believe this increase in the unemployment rate came due to a rise in the labor force participation rate, which increased 0.2% to 62.9% as 601,000 people re-entered the labor force.

Job growth was led by professional and business serviced with 50,000 new jobs added. Manufacturing added 36,000 and healthcare was up 25,000. Retail lost 22,000 jobs.

Average hourly earnings for employees on private non-farm payrolls increased by 5 cents in June 2018 to $26.98, a 72-cent increase from the year before.  

America’s Labor Shortage

Recent reports from ADP and Moody’s Analytics highlighted what is becoming one of the most important economic stories of the year: the difficulty that employers are facing in finding qualified employees to fill a record 6.7 million job openings. Employers in all sectors are dealing with a skills mismatch as the economy moves closer to full employment.

According to the reports, private payrolls grew by 177,000 in June 2018, the fourth month in a row that the ADP/Moody’s count fell below 200,000 after four months at or above that level. The reason for the slowing in hiring isn’t because there aren’t enough jobs, however. The BLS reported that April 2018 closed with 6.7 million job openings, and May 2018 ended with just over 6 million people the BLS classifies as unemployed. This continues the trend of openings eclipsing the labor pool.

Economists predict that employers will have to start doing more to entice workers, through pay raises, training, and other incentives.

“Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse. The labor shortages will only intensify across all industries and company sizes.” ~Mark Zandi, chief economist at Moody’s Analytics

RELATED ARTICLES