Magazine article Economic Trends

Labor Markets

Magazine article Economic Trends

Labor Markets

Article excerpt

Nonfarm payrolls stalled in September, increasing by only 51,000. This weakness was partly offset by an upward revision of 60,000 jobs from the August level of 128,000, but payrolls were still well below expectations. Even so, the three-month average of 121,000 is in line with the recent trend.

The manufacturing sector drained the most blood from total employment, with a loss of 19,000 jobs. Declines in industries related to homebuilding (wood, nonmetallic minerals, and furniture-related products) seemed to reflect the slowdown in the housing sector. There were also reductions in retail trade (-12,000 jobs) and temporary help services (-11,000 jobs). Financial activities and education and health services breathed some life back into employment with a combined increase of 31,000 jobs.

The civilian unemployment rate was virtually unchanged, edging down from 4.7% to 4.6%. The labor force participation rote held at 66.2%, and the employment-to-population ratio stayed at 63.1.

The Diffusion Index of Employment is an important tool for analyzing broad-based labor trends because it measures the proportion of industries where employment rose over a given period. The six-month trend is steadily drifting down toward 50%, the point at which the number of industries where employment is increasing equals the number where it is decreasing. The one-month trend has fallen to 51.4%, its lowest point this year, reflecting a softening labor market. …

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