For us, the US September Jobs Report would have normally been released on October 3. It was recently delayed due to the impact of the recent government shutdown. The delay has raised concerns about the implications for the data among economists and analysts. They’re looking forward to seeing the report show a net gain of approximately 50,000 jobs on the month. The unemployment rate is forecast to remain unchanged at 4.3%. This sense of stability provides an essential glimpse into America’s labor market as we head into the fourth quarter of 2023.
These job gains in September mark a big leap from the preliminary August figure of only 22,000 jobs. This new Economic Census report on the United States’ labor market will be an important baseline to watch how our US labor market is performing. These are major drops in job gains according to the Bureau of Labor Statistics (BLS). Since May, this average has fallen to about 31,000 jobs per month. If the projected job gains for September materialize, they will indicate that 2023 is on track for the weakest employment growth since both the pandemic and the Great Financial Crisis.
Government Shutdown Impacts Data Collection
Due to the government shutdown, the jobs report was delayed. It has further inhibited the release of household survey data, which is key for shedding light on employment trends. As such, headline October figures—most prominently the headline jobs number—will now be included in the November jobs report. Consequently, the compliance deadline has slipped from December 5 to December 16.
In light of this delay, a critical question is how accurately and efficiently can policymakers even begin to measure what is happening in today’s labor market. “Anything that looks kind of ugly now has had the potential to fester for a little bit longer, for the six weeks before we got a better eye on it,” remarked Oliver Allen, reflecting on the uncertainties surrounding the delayed report.
With continuing jobless claims at four-year highs, this canary-in-the-coal-mine situation SUNY’s new report highlights is emblematic of a deeper malaise within the labor market. Analysts have pointed to broad increases across multiple sectors of the economy and robust consumer spending largely driven by wealthy Americans. The worsening affordability crisis is forcing millions of consumers to make fewer purchases.
Anemic Job Growth Continues
Experts are forecasting more of the same, an “anemic job market” as they await September’s numbers. Allison Shrivastava expressed her expectations, stating, “I’m not expecting huge changes in the (September) report, relative to past reports.” This feeling reflects a broader anxiety over automation and the impact of knowledge economy on middle-class job creation — or lack thereof.
Shrivastava reiterated that “we’re in a scary spot. He pointed to the tenuousness of the current labor market, cautioning that it may face significant obstacles down the line. In fact, the job gains in 2024 are expected to be closer to one-fifth of what we’ve seen in years past. This is the surest sign yet that momentum is waning.
Oren Klachkin offered a metaphorical perspective on the labor market’s situation: “If I had to put a metaphor around it, it’s like we’re at the end stages of a marathon for the labor market.” This analogy illustrates the myriad challenges we still face, but highlights that resilience is a key feature of economic recovery.
Consumer Spending and Economic Uncertainty
This makes the role of consumer spending more important than ever to sustaining widespread economic growth. Wealthier Americans have played a critical role in keeping spending levels high even as affordability pressures are beginning to hit millions of other consumers. Shrivastava noted, “This is already a pretty precarious spending situation that could really topple,” indicating that ongoing economic pressures could lead to broader implications if not addressed.
For all the signs that labor markets are vulnerable, like inversion across indicators and drawing comparisons to past recessions, analysts cling to a careful optimism. Klachkin stated, “In the earnings results for the third quarter, the corporate sector is still essentially signaling that we can be relatively upbeat about the economy into next year.” This more optimistic view accepts that short-term obstacles are real but argues there is still potential for significant long-term economic growth if the right measures are taken.