In today’s dynamic economic landscape, one of the most pressing concerns is job growth. The term “job growth” encapsulates the pivotal aspect of any thriving economy and is often at the forefront of policy discussions, corporate strategies, and individual career aspirations. In this article, we delve into the multifaceted world of job growth, exploring its significance, driving factors, and the impact it has on various sectors and society as a whole. So, whether you’re a job seeker, an employer, or simply curious about the forces shaping our workforce, join us on this journey as we unravel the intricate web of job growth and its far-reaching implications.
For over a year, the labor market has been enshrouded in a mystery. According to the Labor Department’s data based on monthly employer surveys, the U.S. economy has added approximately 4.9 million jobs since last March. However, a separate monthly survey of households, which calculates the unemployment rate, reports that about 2.9 million people found employment during the same period.
It’s important to note that these two surveys measure slightly different aspects of employment. For instance, if a worker secures a second job, it contributes to the employer survey’s total but not the household survey. Nevertheless, this disparity has led to questions about the accuracy of government estimations regarding job growth.
Data Revisions on the Horizon
To resolve this discrepancy, the Labor Department is taking action. On Wednesday at 10 a.m. ET, it will release preliminary revisions to employer wage benchmarks for the 12 months ending in March 2023.
Simultaneously, the Labor Department will unveil the Quarterly Census of Employment and Wages (QCEW) for the first quarter of 2023. Unlike monthly surveys, the updated QCEW data relies on state unemployment insurance tax records, offering a more comprehensive perspective on U.S. job statistics.
Factors Contributing to the Mystery
The disparity in job growth between employer and household survey data isn’t the sole reason for skepticism. Deutsche Bank’s senior U.S. economist, Brett Ryan, pointed out that the income growth trends suggested by QCEW data typically align with federal income and payroll tax increases. Surprisingly, recent withholding data indicates a slight decrease compared to the previous year.
The U.S. Treasury Department’s data shows a decline in federal tax revenue, with $2.55 trillion collected in the fiscal year beginning in October, down from $2.57 trillion the previous year. In contrast, Labor Department Employer Survey data reports that total weekly wages for all private-sector workers are approximately 6% higher than a year ago.
Impact of Banking Woes on Hiring
Could the ongoing banking issues be influencing hiring statistics? An analysis by IBD suggests that withholding taxes collected from mid-April to mid-August increased only by 0.6% compared to the previous year. This raises the possibility that recent hiring figures might be inflated.
Withholding taxes can fluctuate based on factors such as year-end bonuses, sales commissions, and vested stock options. Additionally, a substantial increase in the standard deduction in early 2023 may have dampened income growth. These variables make the data somewhat unreliable for predictive purposes, but the QCEW data should provide much-needed clarity.
Potential Impact on Financial Markets
If it turns out that the Labor Department overestimated job growth, it could be attributed to an error in estimating the net effect of monthly business births and deaths on employment. The employment report indicates a continued surge in new business startups, but recent reports have hinted at a slowdown.
One key question is how overall financial conditions, especially the regional banking crisis, are affecting lending and the growth of small businesses.
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Why the Fed Requires a Soft Landing
Recent Federal Reserve data reveals a continued decline in bank deposits, while savers can earn 4% to 5% or more in Treasury bonds and money market funds. S&P Global has downgraded the credit ratings of several regional banks, citing rising funding costs, deposit outflows, and exposure to commercial real estate.
Continued deposit outflows and the looming commercial real estate problem increase the likelihood of the Fed advocating for a soft landing. A scenario in which 10-year Treasury yields continue to rise could generate substantial market volatility.
A significant downward revision in reported job growth would be welcomed by the Fed and the S&P 500, as it would make a soft landing seem more attainable and help alleviate the recent surge in 10-year yields.
As the S&P 500 rally teeters on uncertainty and 10-year Treasury yields climb, the labor market mystery becomes increasingly relevant. The upcoming release of revised data and the Federal Reserve’s stance will undoubtedly impact financial markets. Investors, policymakers, and economists alike will closely monitor these developments, seeking clarity in these uncertain times. Stay informed by reading IBD’s “The Big Picture” daily to make informed trading decisions.
Explore job growth in Washington
According to the Washington Employment Security Department (ESD), the state of Washington added an estimated 104,700 jobs from May 2022 to May 2023, not seasonally adjusted. Private sector employment rose by 2.9%, up an estimated 85,600 jobs, while public sector employment rose by 3.4% — up an estimated 19,100 jobs.
The unemployment rate in Washington was 3.3% in May 2023, down from 3.4% in April 2023. This is below the national unemployment rate of 3.6%.
The industries with the highest job growth in Washington from May 2022 to May 2023 were:
- Professional and business services: 23,800 jobs
- Education and health services: 19,900 jobs
- Trade, transportation, and utilities: 12,500 jobs
- Manufacturing: 9,900 jobs
- Construction: 7,900 jobs
The occupations with the highest job growth in Washington from May 2022 to May 2023 were:
- Software developers: 4,500 jobs
- Registered nurses: 3,900 jobs
- Customer service representatives: 3,500 jobs
- Truck drivers: 3,100 jobs
- Retail salespersons: 2,900 jobs
The job market in Washington is expected to remain strong in the coming months. The state is home to a number of major employers, including Amazon, Microsoft, and Boeing. The tech industry is also growing rapidly in Washington, which is creating new jobs in software development, cloud computing, and other fields.
If you are looking for a job in Washington, there are a number of resources available to help you. The Washington ESD website has a job search portal where you can search for jobs by keyword, location, and other criteria. You can also attend job fairs or contact staffing agencies to help you find a job.
Explore job growth in New York
According to the New York State Department of Labor, New York added an estimated 90,100 jobs from May 2022 to May 2023, not seasonally adjusted. Private sector employment rose by 2.8%, up an estimated 82,000 jobs, while public sector employment rose by 2.3% — up an estimated 8,100 jobs.
The unemployment rate in New York was 3.8% in May 2023, down from 3.9% in April 2023. This is below the national unemployment rate of 3.6%.
The industries with the highest job growth in New York from May 2022 to May 2023 were:
- Professional and business services: 21,800 jobs
- Education and health services: 18,800 jobs
- Trade, transportation, and utilities: 13,400 jobs
- Leisure and hospitality: 9,000 jobs
- Manufacturing: 8,700 jobs
The occupations with the highest job growth in New York from May 2022 to May 2023 were:
- Software developers: 4,400 jobs
- Registered nurses: 3,600 jobs
- Customer service representatives: 3,400 jobs
- Truck drivers: 3,200 jobs
- Retail salespersons: 2,900 jobs
The job market in New York is expected to remain strong in the coming months. The state is home to a number of major employers, including Wall Street, the tech industry, and the entertainment industry. The tech industry is also growing rapidly in New York, which is creating new jobs in software development, cloud computing, and other fields.
If you are looking for a job in New York, there are a number of resources available to help you. The New York State Department of Labor website has a job search portal where you can search for jobs by keyword, location, and other criteria. You can also attend job fairs or contact staffing agencies to help you find a job.