This September US Jobs Report, which would normally have been released on October 3, was one of those casualties. The recent federal government shutdown has delayed its release. With the new date approaching, hopes are ramping up for a big turnaround, perhaps with 50,000 jobs added in September. Forecasters expect the unemployment rate to hold steady at 4.3%. This is an important report. It uncovers some still troubling trends that suggest 2024 will be the year with the weakest job growth since both the pandemic and the Great Financial Crisis.
Indeed Hiring Lab economist Allison Shrivastava expects little movement in this report. That’s because the government shutdown halted all data collection and analysis procedures through October, and into mid-November. Consequently, there’s increasing worry that this year’s reports will be misleading or even grossly inaccurate. Analysts are calling this the last unambiguously good jobs report for some time. It’s this expectation and the damaging effects of the shutdown that are fueling this expectation.
Job Growth Trends
Economists predict that September’s job gains will contribute to an overall slowdown in job growth, a trend observed since the post-pandemic recovery began. Since May, gains have averaged only 31,000 new jobs per month. That’s about one-fifth of what was considered a normal monthly average just earlier this year of 2024. August’s preliminary job numbers were released last week and indicated a gain of anemic 22,000 jobs. Given that modest baseline, it’s pretty safe to say that September’s report will come in above it.
Oliver Allen, senior US economist at Pantheon Macroeconomics, pointed to a looming slowing down of growth in jobs after the pandemic’s economic boom. He notes that the labor market has had a hard time getting traction the last few months. The September jobs report will likely show these slow, frustrating patterns, ringing true to fears about a long-lasting stagnation of new job prospects.
Factors Influencing Employment Data
The bifurcation in the spending environment has deeply shaped where the forces driving labor market dynamics have come from. Wealthier Americans, it is said, are propping up consumer spending — which has proven resilient overall in the face of large-scale economic worries. Consumer patterns are shifting in vastly different directions. Populations that have historically faced inequities are responding very differently to these economic changes, adding even more complexity to the employment landscape.
On that last front, Labor Department data show continuing jobless claims now at four-year highs. The pace of layoffs is not accelerating that quickly. As of October 18, initial claims for unemployment insurance were at 232,000, a sign that although the economy is in a precarious equilibrium, the labor market is still grappling with deeper structural issues lurking just beneath the surface.
Implications of the Government Shutdown
The effect of the government shutdown goes much further than just the postponement of the jobs report. That disruption has further complicated the collection and analysis of all data necessary to ensure Americans have a firm grasp on current labor market conditions. Economists caution that this may lead to less reliable data in future reports, making it harder to gauge employment trends accurately.
Analysts are preparing for the release of September’s jobs report. Their eyes are open to the fact that those interpretations may be subject to change as more guidance comes out over the coming months. The uncertainty added by the temporary shutdown only complicates understanding how these factors will continue to drive expected employment growth in the coming years.