Topline
With another jobs report sidelined Thursday morning by the ongoing government shutdown, several firms and economists have released their own estimates for the labor market in recent days, with many pointing to a further decline.
Several firms have sought to fill a void in the absence of federal data, and most estimates indicate a loosening labor market.
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Key Facts
The Carlyle Group, compiling data from companies in which it holds equity, reported Tuesday an estimated 17,000 jobs were added by employers in the U.S. last month, below the 22,000 nonfarm jobs the Bureau of Labor Statistics reported in August.
Bank of America analysts wrote earlier this week, citing bank and credit card transaction data to measure how many people received wages or unemployment benefits, indicating annual payroll growth of 0.5% in September, below growth between 0.85% and 0.97% the previous three months reported by the BLS, suggesting “some upward momentum to unemployment” and a “further softening” in job market growth.
Analysts from the bank also reported a 10% annual increase in unemployment payments in October.
Goldman Sachs analysts said the firm’s “underlying job growth” tracker indicated 80,000 jobs added in September, but noted the labor market had loosened, implying there are more workers than positions, to levels not seen in at least a decade.
Revelio Labs, a workforce analytics firm reporting on online job postings on sites like LinkedIn, said 60,000 jobs were added in September, with job growth largely driven by new positions in education and health services (45,600), despite a broader decline in job openings (0.6%).
The outplacement firm Challenger, Gray & Christmas reported last week the number of new hires so far this year totaled 204,939, a 58% decline from the year-ago period and the lowest level since 2009, and that employers cut more than 202,000 workers in Q3, the most since employment plummeted during the pandemic.
ADP, a private payroll processing firm, reported last week that private-sector payrolls decreased by 32,000 in September, the largest decline since March 2023.
Contra
Jason Thomas, Carlyle’s head of global research and investment strategy, said Tuesday the labor market is “probably pretty healthy,” arguing a significant decline in immigration under the Trump administration requires fewer jobs to be added to stabilize unemployment.
What Has Wall Street Projected For The Job Market?
Economists projected the unemployment rate to settle at 4.3% for September, according to FactSet, despite last week’s jobs report being delayed by the BLS under the government shutdown. Wall Street estimated the U.S. added about 50,000 nonfarm jobs last month, well above August’s 22,000 added jobs.
What Has The Fed Said About The Job Market?
During its last policymaking meeting in September, the Fed forecast the labor market to weaken “substantially” as the unemployment rate continued to rise above its natural rate, according to the meeting’s minutes released Wednesday. A “majority” of the Federal Open Market Committee meeting’s participants emphasized “upside risks” to inflation, noting that, despite risks to the job market rising, an uptick in unemployment and a “sharp deterioration” in labor market conditions were unlikely. Fed Chair Jerome Powell previously said the central bank moved to lower interest rates last month because of the weakening job market, suggesting policymakers had shifted concerns from stubborn inflation.
What Are Americans Saying About The Job Market?
Americans have grown increasingly pessimistic about hiring in recent months, according to the latest surveys released by the University of Michigan and the Conference Board. About 26.9% of consumers said jobs were “plentiful,” the lowest level since February 2021, while 19% said jobs were “hard to get,” the Conference Board reported. Joanne Hsu, director of the University of Michigan’s consumer sentiment survey, said Americans have become increasingly worried about the outlook for their incomes and personal finances, adding consumers feel “pressure from both the prospect of higher inflation as well as the risk of weaker labor markets.”
Key Background
The U.S. government shut down earlier this month, marking the first shutdown since a 35-day pause in 2018 and 2019. The Senate failed to pass a “continuing resolution” that would have staved off a shutdown by allowing the federal government to operate under its existing budget through Nov. 21. A shutdown has resulted in delays for federal data, like Thursday’s jobless claims or last week’s broader jobs report, for the first time in years. The days-long shutdown has resulted in “safe haven” assets, like gold and long-term Treasury yields, rising in value. Gold prices surged above the $4,000 threshold earlier this week to a fresh record, and bitcoin similarly jumped to an all-time high, despite previously being considered a riskier investment. Adam Turnquist, chief technical strategist for LPL Financial, wrote a government shutdown introduces a “new layer of uncertainty” for markets, although they tend to be short-lived and result in minimal impact on the economy.