November 2, 2018 – Employers added 250,000 jobs last month as the U.S. unemployment rate was unchanged at 3.7 percent, according to the most recent U.S. Bureau of Labor Statistics report. Wall Street analysts had expected an increase of about 195,000. The September gain is the 96th consecutive month of job growth. The number of unemployed people stands at 6.1 million.
The report said that Hurricane Michael, which made landfall during the report’s reference week, “had no discernible effect on the national employment and unemployment estimates for October.”
The labor market, the Federal Reserve said, “has continued to strengthen and … economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low.” The Fed is forecasting the economy will grow 3.1 percent this year — that’s up from the 2.8 percent it projected in June.
Where Job Growth Occurred
- Healthcare added 36,000 jobs in October. Within the industry, employment growth occurred in hospitals (+13,000) and in nursing and residential care facilities (+8,000). Employment in ambulatory healthcare services continued to trend up (+14,000). Over the past 12 months, healthcare employment grew by 323,000.
- In October, employment in manufacturing increased by 32,000. Most of the increase occurred in durable goods manufacturing, with a gain in transportation equipment (+10,000). Manufacturing has added 296,000 jobs over the year, largely in durable goods industries.
- Construction employment rose by 30,000 in October, with nearly half of the gain occurring among residential specialty trade contractors (+14,000). Over the year, construction has added 330,000 jobs.
- Transportation and warehousing added 25,000 jobs in October. Within the industry, employment growth occurred in couriers and messengers (+8,000) and in warehousing and storage (+8,000). Over the year, employment in transportation and warehousing has increased by 184,000.
Employers Look to Continue Hiring Plans
U.S. employers are expecting hiring to pick up in the fourth quarter, with 22 percent of employers planning to add staff, according to the latest “Employment Outlook Survey,” released today by ManpowerGroup. Employers in all U.S. regions and industry sectors are looking for headcount to grow.
- Employment in leisure and hospitality edged up in October (+42,000). Employment was unchanged in September, likely reflecting the impact of Hurricane Florence. The average gain for the 2 months combined (+21,000) was the same as the average monthly gain in the industry for the 12-month period prior to September.
- In October, employment in professional and business services continued to trend up (+35,000). Over the year, the industry has added 516,000 jobs.
- Employment in mining also continued to trend up over the month (+5,000). The industry has added 65,000 jobs over the year, with most of the gain in support activities for mining.
- Employment in other major industries—including wholesale trade, retail trade, information, financial activities, and government—showed little change over the month.
Search Consultants Weigh In
“While the U.S. unemployment stands at 3.7 percent (the lowest since December of 1969) it follows a trend of continued job gains for over the past eight years,” said Walter Baker, managing partner and founder of Pitcairn Partners. “Nonetheless, the mid-term elections could significantly impact the labor market and also influence company’s future hiring decisions. Aspects like immigration policy, healthcare strategy and budget, to name a few, can certainly have an impact on the availability of talent going forward.”
“Within a longer-term perspective, the war for talent predicted almost 20 years ago by McKinsey is here to stay,” he says. “The talent shortage isn’t a passing phenomenon, and the lack of skilled workers needed to drive business strategy is a serious threat to the profitability of organizations as well as the GDP of both developed and developing nations. Expected shortages are not limited to any geography,” Mr. Baker said.
“China, for instance, may have a deficit of 6.7 million highly skilled workers by 2030, with the U.S. right behind it with a deficit of 6.6 million workers. Five other countries could have deficits of 2 million or more workers. The implications are huge. Top level talent is attracted by the opportunity for growth. To attract this level of talent, companies must ensure leadership talent is in place and aligned to execute business strategy,” he said. “Those that do not will face an uphill battle to identify and attract impactful leaders that can deliver results.”
“The U.S. economy is strong and projected to remain that way for the next three years – at least,” said Gary Erickson, managing partner for Executive Search Partners. “And the employment rate which is already low will continue to drop. Effectively we are beyond full employment. Demand for high quality employees is outpacing supply and one of the hottest sectors is IT, the sector that Executive Search Partners focuses on,” he said. “Attracting and retaining top technical talent has become critical for the survival of just about every company.”
“For IT workers this is great news as salaries should continue to outpace inflation and opportunities to accelerate career growth (new job) are and will remain strong,” Mr. Erickson said. “There is a very strong competition for technical talent and it’s not just about salaries. To attract technical talent, copy the best – look at Google, Apple, and Amazon. This includes offering very competitive salaries, bonuses, stock, excellent benefits, excellent training programs, work life balance, fun and a growing company.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media