Mr. Tannenbaum warned that the surprising jump in wage growth and the lowering of the jobless rate were aberrations. Because many low-wage workers were temporarily displaced, he said, the overall wage average appeared better than it probably was. The household survey, the basis for the jobless rate, was probably distorted as well, he said.
“As winds calm, my guess is the employment figures will stabilize,” he said.
As for the reaction of the Federal Reserve, which has been closely monitoring the employment report, Mr. Tannenbaum said “the Fed is looking past” this month’s report.
Using Hurricane Katrina in August 2005 as a benchmark, Jim O’Sullivan, chief United States economist at High Frequency Economics, said he expected payroll gains to bounce back by the end of the year. “That was pretty much a two-month story at the time,” he said. Payroll gains had averaged 249,000 in the six months before Katrina. After New Orleans found itself underwater, employment gains averaged 76,000 over the next couple of months before rebounding to 341,000 in November 2005.
(Although Hurricane Maria also devastated Puerto Rico in September, the survey of employers that the Bureau of Labor Statistics uses to calculate monthly payroll gains does not include the island.)
Revised figures for July and August showed that a total of 38,000 fewer jobs were created in those two months than previously reported. Although some analysts had hoped to see those figures revised upward, summer is not generally considered the best time to gauge the labor market’s strength because it coincides with a gap in the school calendar.
Despite the discouraging payroll totals for September, Mr. Tannenbaum said, “The American job market is still performing awfully well considering we’re now in the ninth year of an economic expansion.”
The View From Washington
President Trump has been calling attention to the economy’s successes, writing on Twitter on Thursday, “Stock Market hits an ALL-TIME high! Unemployment lowest in 16 years!” and saying last week that the Republicans’ proposed tax cuts would provide “rocket fuel for our economy.”
Stock market indexes have indeed set records in recent days. But much of the evidence cited by Mr. Trump refers to measures that he dismissed as fake before he was elected. And sentiment about the economy’s health often reflects partisan leanings as much as money in the bank. Republicans credit Mr. Trump, while Democrats say the Obama administration is responsible for the economy’s continuing strength.
As far as the labor market numbers go, the jobless rate, measuring unemployment among those actively in the work force, is down from the 4.8 percent mark posted in January. And although average monthly job growth has slowed from 209,000 in 2016, economists are impressed by the labor market’s hardiness more than eight years into the recovery.
Robert Frick, corporate economist with Navy Federal Credit Union, said he expected job gains to continue. “There is still quite a lot of slack in the labor force,” Mr. Frick said, adding that he expects the job market to show strength.
The Wage Outlook
With the jobless rate remaining low, economists — not to mention workers — are focused on wage increases, which have meandered along at an annual gain of just 2.5 percent for most of this year. Although the Census Bureau last month reported a jump in annual incomes across a wide spectrum, households with incomes below the median are still worse off than they were in 2000.
There are signs that the labor shortage is nudging up wages in some places. Target announced last month that it was increasing its base hourly pay by $1, to $11 — higher than or equal to the minimum wage in every state. While workers are waiting for faster wage growth, Wall Street and the Federal Reserve are looking for signs that the economy is heating up and inflation lurks.
Amy Glaser, senior vice president of Adecco Staffing, said employers she worked with were raising wages and tapping into less common employee pools like retirees, stay-at-home moms and people with disabilities. Employers are also trying to generate and educate their own work forces by offering more paid internships and apprenticeships. Others are shortening the interview cycle to improve their chances.
“There is a need for speed,” Ms. Glaser said. “Whoever gets to a candidate first is well positioned.”
Adecco is using automated technology to speed up its hiring process, Ms. Glaser said. Previously, applicants who reached out after office hours had to wait until the next day to schedule an appointment, but now, she said, “if you apply at 9 p.m. at night, our computer is scheduling their appointment for the next day if they pass pre-screening.”
Ms. Glaser said she expected wages to rise further, saying some of her clients were thinking about raising hourly wages as much as 20 to 40 percent during the peak holiday season and early 2018. Employers are also pushing to retain the employees they have — for example, by offering more bonuses for e-commerce and other seasonal workers who stay through the holidays.
Radial, the second-largest direct-to-consumer e-commerce company behind Amazon, is hiring 27,000 people to work through mid-January in its 25 warehouses around the country. Even as brick-and-mortar retail is suffering significant losses, e-commerce continues to thrive.
“We’re hiring 35 percent, or 7,000, more people than we did last year,” said Stefan Weitz, Radial’s executive vice president for technology services. “It’s very competitive. A lot of logistics companies have operations in similar areas because of the proximity to air and ground transport.”
The hourly wage offered is $12 to $16, depending on the location, Mr. Weitz said. And in some places, the company supplies free buses to transport people who live as far as two hours away. (The company has 7,000 full-time employees who work year round.)
At the upper end of the labor market, the competition for highly skilled workers is intense. Bryan Leach, founder of Ibotta, a Denver company offering a mobile shopping app, said he had hired more than 100 people this year, including engineers, product managers and data scientists, mostly at six-figure salaries.
“We are hiring national search firms to shop for talent in the coasts,” in addition to seven in-house recruiters, Mr. Leach said. The company has also helped sponsor billboards in San Francisco promoting the benefits of living in Denver and offered $1,000 to employees who refer a friend who is hired.
The Weak Spots
Despite the scramble for workers, the labor market harbors stubborn weak spots. Many of the jobs that are available are at the lower end of the pay scale and don’t offer long-term stability — like the seasonal ones at Radial.
For some workers, those jobs have limited appeal. The share of adults who are in the work force remains at historic lows, and many workers who dropped out or failed to find an entry point during the recession are still on the sidelines. At this point, much of the decline in labor force participation rates can be attributed to baby boomers who are retiring and younger workers who are staying in school to get more skills, said Alan B. Krueger, an economist at Princeton University. More troubling are the numbers of people in their prime working ages — 25 to 54 — who are out of the work force.
About half of the men in that age group take pain medication daily, Mr. Krueger said. And the places with the highest level of opioid prescriptions are also the ones where participation has fallen the most. Mr. Krueger blames the opioid epidemic for about 20 percent of the decline in the men’s participation rate.
Betsey Stevenson, an economist at the University of Michigan and a former economic adviser to President Barack Obama, noted that this group’s involvement in the labor force had dropped in 2017.
“Trump promised to get these guys back to work,” she said. “Since he took office, prime-age male labor force participation has fallen by half a percentage point.”
The share of women 25 to 54 in the labor force has also fallen since 1999, but the accelerated slide that began after the recession has halted.
“It seems like the trend of men’s participation falling during a recession and not fully recovering is holding, whereas women’s participation is recovering,” Ms. Stevenson said.
Improved benefits — like paid maternity leave and better child care, strategies that have proved very effective in other advanced industrial nations — could further pump up those numbers, she added.
While prospects for men who ended their education after high school have been particularly bleak, Dean Baker, a co-director of the liberal Center for Economic and Policy Research in Washington, noted some improvement among their female counterparts.
“Interestingly, the pickup is mostly among prime-age women without college degrees,” he said. “Of course, less-educated women are starting from a lower initial level, but to me this suggests that many of the previous nonemployed are very much interested in working.”
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