Insights and Perspectives

Labor Market Continues to Expand in 2024

Fri, 08 Mar 2024 14:12:00 GMT

The Labor Market Report is derived from two monthly surveys from The Bureau of Labor Statistics (BLS) that measure labor market trends: The Current Employment Statistics (CES) survey and The Current Population Survey (CPS).

The U.S. Economy Gained 275,000 Jobs in February

Key Takeaway: Job creation finished close to the Geographic Solutions, Inc. expectations of 258,000 jobs and well above the WSJ Survey expectations of 198,000 jobs.

THE EMPLOYMENT LANDSCAPE
According to the monthly Bureau of Labor Statistics (BLS) report, employment in the U.S. in February 2024 gained 275,000 additional jobs, while the unemployment rate increased to 3.9%. Despite downward revisions in December and January, employment ended February with the best 3-month performance since the April-June 2023 period.

JOB CREATION
Job creation was strongest in the Private Education & Health Services (+85,000), Leisure & Hospitality (+58,000), and Government (+52,000) sectors, while no sectors saw significant job loss. Leisure & Hospitality employment is 0.1% below its total in February 2020. It is on track to surpass its pre-pandemic peak next month and would be the last major sector to achieve this.

UNEMPLOYMENT LANDSCAPE
The U-6 unemployment rate nudged up to 7.3% in February from 7.2% in January. The rise in both types of unemployment rates (U-3 & U-6) with an unchanged labor force participation rate sends a different signal from the employment numbers. It shows a weakening labor market.

REAL WAGES
Real wages have consistently increased since September 2023. Inflation data will not be released until next week but if prices rose similarly to the previous four months, real wages declined in February.

GSI Labor Market Forecast: February 2024

Tue, 05 Mar 2024 14:22:00 GMT

Geographic Solutions derives its employment forecast and unemployment rate forecast from internal data on the number of job openings/searchers/applications and unemployment applications filed on Geographic Solutions' state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

Geographic Solutions, Inc. has produced forecasts for the monthly change in employment and the monthly unemployment rate. These are the two most closely watched macroeconomic data series from The Bureau of Labor Statistics' (BLS) monthly surveys that measure labor market trends, The Current Employment Statistics (CES; also known as "the payroll" or "the establishment" survey) and The Current Population Survey (CPS; also known as "the household survey").

GEOGRAPHIC SOLUTIONS PREDICTS:

Jobs are predicted to increase in February by 258,000, in keeping with the strengthening trend seen since October last year.

The Chart shows shaded ranges that represent 80% and 90% probabilities of the actual employment result.
Geographic Solutions' employment forecast is represented by the horizontal blue line to the right.

In Comparison:

Job Creation in the 1st quarters since 2021 has outperformed other quarters. January’s strong result of 353,000 indicate that is continuing in 2024.

GEOGRAPHIC SOLUTIONS PREDICTS:
The unemployment rate will increase to 3.8% for February, which is slightly higher than the 3.7% we saw in January.

This chart shows shaded ranges that represent 80% and 90% probabilities of the actual unemployment rate result.
Geographic Solutions' unemployment rate forecast is represented by the horizontal blue line to the right.

On Friday, March 8th, The Bureau of Labor Statistics (BLS) will release their two monthly surveys,
The Current Employment Statistics (CES) survey and The Current Population Survey (CPS).

After the release of the report, Geographic Solutions will post a full analysis of the results.

Labor Market Explodes to Start the Year

Fri, 02 Feb 2024 14:44:00 GMT

THE SIGNIFICANCE

What:

The U.S. economy gained 353,000 jobs in January while the labor force and unemployment rate remained unchanged. Job creation far exceeded the Geographic Solutions, Inc. expectations of 255,000 jobs and the WSJ Survey expectations of 185,000 jobs.

Why:

Strong consumer spending has continued to lift the labor market, despite layoff announcements from a handful of prominent companies. The only discouraging sign is that average weekly hours fell to 34.1. Excluding March 2020 when the pandemic began, that is the lowest reading for this indicator since June 2010.

When:

We expect a softening trend to establish itself in the coming months as past Federal Reserve interest rate hikes continue to exert their effects on the economy and household savings dwindle.

THE LANDSCAPE

According to the monthly Bureau of Labor Statistics (BLS) report, employment in the U.S. in January 2024 gained 353,000 additional jobs, while the unemployment rate stayed at 3.7%. It was the largest monthly gain since January 2023. Job additions have accelerated for three consecutive months.

Job creation was strongest in the Private Education & Health Services (+112,000), Professional & Business Services (+74,000), and Trade, Transportation & Utilities (+64,000) sectors, while no major sectors lost jobs.

After posting no net new jobs in December, the Trade, Transportation & Utilities saw one of the largest increases in January.

The labor force participation rate held steady in January after dropping 0.3% to 62.5% in December; the largest one-month decline since January 2021.

The U-6 unemployment rate nudged up to 7.2% in January from 7.1% in December. This is another indication that some part-time workers desire a full-time position.

The U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job.

As mentioned earlier, weekly hours are down but wage increases have grown large enough to improve real income (hours x wages adjusted for inflation) for the employed.

Labor Market Defies Expectations in 2023

Fri, 05 Jan 2024 20:28:00 GMT

According to the monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) from The Bureau of Labor Statistics (BLS), employment in the U.S. in December 2023 gained 216,000 additional jobs, while the unemployment rate stayed at 3.7%.

THE LAYOUT:

• Job creation was strongest in the Education & Health Services (+74,000), Government (+52,000), and Leisure & Hospitality (+40,000) sectors, while Trade, Transportation & Utilities was the weakest among the major sectors with no new jobs.

• The labor force participation rate dropped 0.3% to 62.5% in December; the largest one-month decline since January 2021. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment nudged up to 7.1%.

THE SIGNIFICANCE:

• While the positive December report is somewhat dampened by the decline in the labor force participation rate, the calendar year performance has been much more upbeat than predicted. Employment and real wages expanded, leading to real private-sector workers earning 0.5% more in 2023 than the previous year. However, we expect a softening trend to establish itself in the coming months as past Federal Reserve interest rate hikes continue to exert their effects on the economy and household savings dwindle.

Healthy Job Growth, but Labor Market Still Poised to Soften

Fri, 08 Dec 2023 19:35:00 GMT

According to the monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) from The Bureau of Labor Statistics (BLS), employment in the U.S. in November 2023 picked up to 199,000 additional jobs, while the unemployment rate declined to 3.7%.

THE LAYOUT:

• Job creation was strongest in the Education & Health Services (+99,000) and Government (+49,000) sectors, while Trade, Transportation & Utilities (-35,000) shed the most jobs.

• The labor force participation rate rose slightly to 62.8% in November. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment fell to 7.0%.

THE SIGNIFICANCE:

• A jobs report showing wage and employment gains along with a lower unemployment rate and a higher labor force participation rate is usually something to celebrate. However, the overall softening trend is likely to continue as past Federal Reserve interest rate hikes continue to exert their effects on the economy and household savings dwindle.

• Real wage gains improved last month but have moved sideways since the beginning of the year. Job openings data from the Bureau of Labor Statistics and Geographic Solutions, Inc. have been declining for more than 15 months. This suggests the labor market is poised to weaken the next year but may be able to avoid a recession as a majority of economists in the WSJ survey are now predicting.

Yo-Yo Employment Gains Over Previous Six Months

Fri, 03 Nov 2023 18:27:00 GMT

According to the monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) from The Bureau of Labor Statistics (BLS), employment in the U.S. in October 2023 slowed to 150,000 additional jobs, while the unemployment rate ticked up to 3.9%.

THE LAYOUT

Job creation was strongest in the Education & Health Services (+89,000) and Government (+51,000) sectors, while Manufacturing (-35,000) shed the most jobs.

The labor force participation rate fell slightly to 62.7% in October. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment increased to 7.2%.

Less than half of occupations (SOC Groups) and industry sectors (NAICS) saw an increase in job openings on Geographic Solutions state client sites.

THE SIGNIFICANCE

While some of the weakness in October’s report may be due to major labor strikes, the performance is disappointing across the board: Joblessness is up while the labor force participation rate is down, job gains softened while work hours and real wages declined (assuming the continued inflation trends of the three previous months).

Those looking for a turning point in the overall economy may feel that the evidence in this report is piling up in their favor. However, the last six months show volatile job creation, going back and forth between strong and weak (see 1st chart). Next month could hold this pattern and change attitudes towards the economy once again.

September Jobs and July/August Revisions Show Stronger Job Market

Fri, 06 Oct 2023 14:54:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for September 2023 on Friday, October 6th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose steeply by 336,000 jobs. The job results were more than double the expectations of Geographic Solutions, Inc. (153,000) and the Wall Street Journal Economist Survey (170,000). Geographic Solutions derives its employment forecast from internal data on the number of job openings, job applications and job severances, and unemployment applications filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate stayed at 3.8% in September, matching the Geographic Solutions forecast. The WSJ forecast projected the unemployment rate would tick down to 3.7%. The unemployment rate forecast uses internal data on the number of job openings, job applications, job severances, job searchers, and unemployment applications filed on Geographic Solutions state client sites.

Job creation was strongest in the Leisure & Hospitality (96,000), Government (73,000), and Education & Health Services (70,000) sectors. Other sectors were modestly positive, and none had major job losses.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment levels. However, Government appears ready to surpass that level within the next two months.

The labor force participation rate stayed at its post pandemic high of 62.8% in September. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment fell to 7.0%.

Employment was quite a bit stronger over the last three months than originally estimated. Revisions in July and August added 119,000 more jobs than reported last month. Jobs, especially in Leisure & Hospitality have been boosted by persistently strong consumer spending. Also, the month of September has repeatedly seen unexpected job growth in state employment education since the pandemic began, indicating new seasonal patterns that are not yet captured by the BLS’s seasonal adjustments.

Nevertheless, there are some signs that the labor market may not be as tight as it seems at first glance. Wage gains are softening somewhat while the number of part-time jobs has been growing, albeit unevenly, since mid-2022. This may be a sign that employers are nervous about an economic downturn but want to avoid employee shortages once the economy strengthens.

Job Growth Softens over the Summer

Fri, 01 Sep 2023 15:25:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for August 2023 on Friday, September 1st. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 187,000 jobs. The job results were slightly above the Geographic Solutions, Inc. forecast of 180,000 while the WSJ estimate was further away at 170,000. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job applications and job severances filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate rose to 3.8% in August. The Geographic Solutions forecast and the WSJ forecast projected the unemployment rate would maintain the 3.5% result from July. The unemployment rate forecast uses internal data on the number of job openings, job applications, job severances, and unemployment applications filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor.

Job creation was strongest in the Education & Health Services (102,000) and Leisure & Hospitality (40,000) sector. Other sectors were modestly positive, but the Trade, Transportation, & Utilities and Information sectors lost jobs.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment levels.

The labor force participation rate grew in August for the first time since March 2023, reaching 62.8%. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment increased to 7.1%.

Employment noticeably softened during the summer, averaging only 150,000 new jobs per month from June through August after averaging 238,000 from March to May of this year. The 3.8% unemployment rate is also signaling some weakening in labor demand. Education & Health Services has led the way in job increases for the third straight month and made up the majority of new jobs in July and August. The Fed’s interest rate policy is having a moderating effect on the labor market. The near term prognosis for the labor market is likely sub-200,000 monthly job growth as the Fed’s interest rate hikes continue to work their way through the economy.

Job Growth Remains Steady in July

Fri, 04 Aug 2023 15:32:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for July 2023 on Friday, August 4th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 187,000 jobs. The job results were below the Geographic Solutions, Inc. forecast of 244,000 while the WSJ estimate was closer at 200,000. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job openings, job applications, job severances, and unemployment applications filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate fell to 3.5%. The Geographic Solutions forecast matched the 3.5% result and outperformed the WSJ estimate of 3.6%. The unemployment rate forecast uses internal data on the number of job openings, job severances, and unemployment applications filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor.

Job creation was strongest in the Education & Health Services (100,000) sector. Other sectors were modestly positive, but the Manufacturing, Information, and Professional & Business Services industries lost jobs.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment levels.

Labor force participation maintained its 62.6% rate for the fifth consecutive month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment declined to 6.7%.

Looking at employment over the last year, it appears that the Fed’s interest rate policy has had a moderate effect on the labor market. With the exceptions of January and May 2023, job growth has been on a slight glide path to end up under 200,000 in June and July. Education & Health Services has led the way in job increases for the second straight month and made up most of new jobs in July. This might be due to seasonal factors that have changed in the post-pandemic era and will require consideration for any yo-yo effects that might occur in the coming months. The near-term prognosis for the labor market is likely sub-200,000 monthly job growth as the Fed’s interest rate hike continued to work their way through the economy.

Labor Market Report Shows Continuity in June

Fri, 07 Jul 2023 12:17:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for June 2023 on Friday, July 7th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 209,000 jobs. The job results were below the Geographic Solutions, Inc. forecast of 248,000, but was virtually tied with the Wall Street Journal estimate of 240,000. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job openings, job applications, job severances, and unemployment applications filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate fell to 3.6%. The Geographic Solutions, Inc. had anticipated an uptick to 3.8% while the WSJ estimated it would decline to 3.6%. The unemployment rate forecast uses internal data on the number of job openings, job searchers, and unemployment applications filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor.

Job creation was strongest in the Education & Health Services (73,000) and Government (60,000) sectors. Other sectors were flat or down. However, Construction did add 23,000 jobs.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment levels.

Labor force participation maintained its 62.6% rate from the previous three months. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment increased to 6.9%.

The June employment report revealed that payroll jobs continue to grow at a brisk pace, despite the fears of a slowdown as the Federal Reserve tackles inflation. These results are in line with expectations, and there is not a lot to draw on for what we might see in the months ahead. Job openings still far outnumber the unemployed, so that is somewhat promising for future job growth.

A Tale of Two Surveys in May

Fri, 02 Jun 2023 17:07:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for May 2023 on Friday, June 2nd. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 339,000 jobs. The job results were significantly above the Geographic Solutions, Inc. forecast of 189,000 which was virtually tied with the WSJ estimate of 190,000. May’s unexpectedly strong results are compounded by the upward revisions in March and April that totaled 93,000 more jobs than reported last month. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job counts and job severances filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate surged to 3.7%. The Geographic Solutions, Inc. and WSJ forecasts had anticipated an uptick to 3.5%. The unemployment rate forecast uses internal data on the number of job openings and gross job posts on Geographic Solutions state client sites.

Job creation was strongest in Education & Health Services (97,000). Professional & Business Services, Government and Leisure & Hospitality sectors were the other major contributors to employment. Manufacturing was flat, and Information was the only major sector to experience notable job loss.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment levels.

Labor force participation maintained its 62.6% rate from the previous two months. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment increased to 6.7%.

The May employment report revealed that payroll jobs continue to grow at a brisk pace, despite the fears of a slowdown as the Federal Reserve tackles inflation. However, the rising unemployment rate from the Household Survey makes labor market conditions less clear. Looking forward, June’s employment report will probably not tell us much because of the standoff over raising the federal debt ceiling between Congress and the Whitehouse. Although a default appears to have been averted, many companies may have made contingency plans after May 12th (when the June survey period starts) which involve a slowdown in hiring. July should reveal more about the resilience of the labor market heading into the 2nd half of 2023.

Employment Steadily Expands in April

Mon, 08 May 2023 17:22:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for April 2023 on Friday, May 5th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 253,000 jobs. The job results were above the Geographic Solutions, Inc. forecast of 212,000. The forecast outperformed the WSJ estimate of 180,000. April’s unexpectedly strong results are the second disruption to the slowing trend we have seen in hiring, since July 2022. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job counts and gross posts filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate declined to 3.4%, tying a 50-year low. The Geographic Solutions forecast had anticipated an uptick to 3.6%. The unemployment rate forecast uses internal data on the number of job openings, unemployment applications, and job severances on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

Job creation was strongest in Education & Health Services (77,000). Leisure & Hospitality, Professional & Business Services, and the Government sectors were the other major contributors to employment. All industries saw at least some positive job growth.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment levels.

Labor force participation maintained its 62.6% rate from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment declined to 6.6%.

The April employment report is a great sign that the labor market is steadily adding jobs in the face of interest rate increases by the Federal Reserve, even though revisions decreased new job creation by a combined 149,000 in February and March. Additionally, April shows the fallout of the regional bank failures in March which do not seem to have had a dramatic impact. The possibility of avoiding a sustained period of job loss is still a challenge but appears somewhat more feasible after April’s performance.

Employment Gains Still Going Strong in March

Fri, 07 Apr 2023 18:38:39 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for March 2023 on Friday, April 7th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 236,000 jobs. The jobs results were below the Geographic Solutions, Inc. forecast of 317,000 but in line with the WSJ forecast of 238,000. This is the second consecutive month that job growth has slowed which may signal that employment has returned to the slowing pattern it had established throughout the second half of 2022. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job searchers, job applications, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate declined slightly to 3.5%, matching the WSJ estimate. The Geographic Solutions forecast had anticipated an uptick to 3.7%. The unemployment rate forecast uses internal data on the number of job openings, unemployment applications, and job severances on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

Job creation was strongest in Leisure & Hospitality (72,000) and Education & Health Services (65,000). Other major contributors to employment were Professional & Business Services and the Government sectors. Construction shed 9,000 jobs. Other industries were flat.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment levels.

The labor force participation rate increased to 62.6% from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment declined to 6.7%.

The March Labor Market Report shows that job growth has slowed. Although fewer, the representation remained a solid expansion, with an increase in the labor force participation rate. Furthermore, year-over-year private sector wage gains increased at the lowest rate since June 2021, an encouraging sign that the inflation rate remains on a downward trajectory. However, the surveys for the report were conducted in early March, and do not reflect the recent turmoil in the banking system. This may have future ramifications for jobs and unemployment based on a mix of reactions from the Federal Reserve, the U.S Treasury Department, and employers.

Large Employment Gains Continue in February

Fri, 10 Mar 2023 13:46:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for February 2023 on Friday, March 10th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 311,000 jobs. The jobs results were above the Geographic Solutions, Inc. forecast of 264,000 but closer than the WSJ forecast of 225,000. Although the gains were smaller than the surprising 504,000 new jobs in January, the performance in February was still strong. It is still a bit early to conclude that employment has reestablished its softening pattern after the growth outburst in January. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job searchers, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate increased to 3.6%, right in line with the Geographic Solutions forecast. The WSJ estimated that the unemployment rate would remain unchanged at 3.4%. The unemployment rate forecast uses internal data on the number of job openings, unemployment applications, and job severances on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

Job creation was strongest in Leisure & Hospitality (105,000) and Education & Health Services (74,000). Job growth was mixed in other industries but positive on net.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment level.

The labor force participation rate increased to 62.5% from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment rose to 6.8%.

The jobs market is in an interesting spot as it relates to inflation. Typically, large job gains are seen as putting upward pressure on inflation. However, more jobs can also increase production and having more goods and services in the market can alleviate inflation from the supply side. Wage data from the report is signaling that inflation caused by increased salary demands by employees is on the wane. Wage increases have slowed for three consecutive months and are at the lowest growth rate in a year. At this point it is still too early to conclude that inflation rates are definitively heading downward, but this report is giving us reasons for optimism.

The Labor Market Erupts to Start off 2023

Fri, 03 Feb 2023 13:18:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for January on Friday, February 3rd. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 517,000 jobs, the largest gain since July last year. The jobs results were well past expectations in the Geographic Solutions, Inc. forecast of 239,000. However, the forecast still outperformed the WSJ Economist Survey estimate of 187,000. Job growth has been slightly softening since August 2022, and despite the strong growth in employment in January, we expect this softening trend to reassert itself for the next few months. Geographic Solutions derives its employment forecast from internal data on the number of job openings, job searchers, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate fell to 3.4%, matching the Geographic Solutions forecast. The WSJ Economist Survey projected a higher unemployment rate of 3.6%. The unemployment rate forecast uses internal data on the number of job openings, job applications, unemployment applications, and job severances on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

Job creation was strongest in Leisure & Hospitality (128,000) and Education & Health Services (105,000). Professional & Business Services (82,000), Government (74,000) and Trade, Transportation, & Utilities (63,000) also contributed substantially to January job gains. Other sectors were flat to slightly positive.

Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment level.

The labor force participation rate increased to 62.4% from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment ticked up to 6.6%.

The surprisingly high job numbers for January combined with a further easing in wage growth provide reasons for optimism on taming inflation:

1) More employment translates to more production which can alleviate inflation from the supply side.

2) Easing wage growth can take pressure off producers to raise prices.

Employment will probably return to the 200,000 to 300,000 pace we have seen for the last few months before January. The Federal Reserve this week revealed that it was adopting a slower rate hike approach of 0.25% per month to see how its cumulative rate hikes for the last year will play out in the labor market and broader economy. The hope is that this breathing room will reveal that the Fed’s previous actions to reduce the inflation rate have taken hold and employers will be able to operate with more certainty on prices and interest rates.

Employment Remains Above 200K, but Shows Signs of Slowing

Fri, 06 Jan 2023 15:55:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for December 2022 on Friday, January 6^th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 223,000 jobs. The jobs results ended up between the Geographic Solutions, Inc. forecast of 273,000 and the WSJ forecast of 200,000. Job growth has been slightly softening since August 2022. Additionally, with the exceptions of the outbursts in job creation in February and July 2022 depicted in the above chart, job growth has been gradually weakening since October 2021. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job searchers and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate fell to 3.5%, below the Geographic Solutions and WSJ forecasts of 3.7%. The unemployment rate forecast uses internal data on the number of job openings, job searchers, job applications, unemployment applications, and job severances on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

Job creation was strongest in Education & Health Services (78,000) and Leisure & Hospitality (67,000). Job growth was flat in all other industries except Trade, Transportation, & Utilities and Construction which gained a combined 55,000 jobs.

While all sectors continued to grow in 2022, Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment level.

The labor force participation rate increased to 62.3% from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment declined to 6.5%.

The U.S. labor market expanded by 4.5 million jobs in 2022 as recovery from the Covid-19 pandemic continues. Despite this impressive achievement, it appears that the Federal Reserve’s drastic interest rate increases have managed to slow the pace of job growth throughout the year, albeit unevenly. Wage increases also seem to be tapering off. Both of those developments bode well for taming inflation and bringing price relief to consumers in 2023. The main question in the new year is will the Federal Reserve be able to accomplish this without pushing the labor market into a downturn.

Initial Job Estimates Locked at 260K in Previous Three Months

Fri, 02 Dec 2022 18:12:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for November 2022 on Friday, December 2nd. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 263,000 jobs. The jobs report exceeded the Geographic Solutions, Inc. forecast of 152,000 and the WSJ forecast of 205,000. While the result is higher than expectations, it remains well within the prediction interval. Despite fluctuations among indicators pointing to a slower pace of job creation, initial estimates over the last three months have been remarkably locked in place with September reporting 263,000 initial new jobs, October reporting 261,000 initial new jobs, and November reporting 263,000 initial new jobs. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job openings, job searchers, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate remained at 3.7%, below the Geographic Solutions forecast of 3.8%. The WSJ forecast of 3.7% matched the result. The unemployment rate forecast used internal data on the number of job openings, job searchers, unemployment applications, and job severances on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

While all sectors continue to grow, Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment level.

The labor force participation rate fell to 62.1% from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment declined to 6.7%.

The main takeaway from the report is that the labor market is still hiring at a healthy pace, even as fewer people remain in the labor force and the Federal Reserve continues to raise interest rates to dampen economic activity. Perhaps the overriding factor for these substantial month-to-month job gains is that the number of job openings continues to far exceed the number of those unemployed.

Job Creation Maintains Healthy Expansion in October

Fri, 04 Nov 2022 16:59:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for October 2022 on Friday, November 4th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 261,000 jobs. The jobs report exceeded the Geographic Solutions, Inc. forecast of 205,000. While the result is higher than expectations, it remains well within the prediction interval as new employment seems to have glided into a sub-320,000 pattern over the last three months. The forecast tied the WSJ Economist Survey which also predicted an increase of 205,000. This is the first time that GSI and WSJ predictions were exactly aligned since January 2021. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job openings, job searchers, job applications, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL). Additionally, an indicator combining the interest rate on two-year treasury bills and the consumer price index were inserted to account for inflationary effects on the labor market.

The unemployment rate increased to 3.7%, above the Geographic Solutions and WSJ forecast of 3.5%. The unemployment rate forecast used internal data on the number of job openings, job searchers, unemployment applications, and job severances on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

Job creation was strongest in Education & Health Services (79,000), Professional & Business Services (39,000), and Leisure & Hospitality (35,000). Job growth was flat to positive in all industries.

While all sectors continue to grow, Leisure & Hospitality and Government are the only major sectors to remain below their pre-pandemic employment level.

The labor force participation rate fell to 62.2% from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment ticked up to 6.8%.

The two surveys are sending mixed messages about the labor market. The CES portrays a job market that has been steadily growing for months. However, the CPS is showing much more slack in the labor market as the number of unemployed increases, even as the labor force declines. Inflation, and the actions to contain it, are still major concerns for the labor market going forward. Private-sector wages have declined by 4.2% since February 2021, right before this accelerated inflationary period began. As the workforce demands higher wages to keep up with inflation, hiring is likely to slow and net job losses are possible.

GSI Labor Market Report: September 2022

Thu, 06 Oct 2022 13:11:00 GMT

The Bureau of Labor Statistics (BLS) will release its monthly Current Employment Statistics (CES) and Current Population Survey (CPS) report for September 2022 on Friday, October 7th. Geographic Solutions, Inc. has produced forecasts of the two most closely watched macroeconomic data series from the report: the monthly change in employment and the monthly unemployment rate.

Geographic Solutions’ data is pointing to another month of solid job gains for September. As seen in the chart below, jobs are predicted to increase in September by 335,000. Geographic Solutions derives its employment forecast from internal data on the number of job searchers, job applications, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

Portrayed in the chart below is the 3.8% unemployment rate that Geographic Solutions forecasts for September, an uptick from its rate in August. The unemployment rate forecast uses internal data on the number of job openings, job searchers, and job severances on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

After the release of the report, Geographic Solutions will post a full analysis of the results.

Job Creation Maintains Healthy Expansion in May

Fri, 03 Jun 2022 13:19:00 GMT

The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for May 2022 on Friday, June 3^rd. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.

Employment in the U.S. rose by 390,000 jobs. The jobs report exceeded the Geographic Solutions, Inc. forecast of 205,000. While the result is significantly higher than expectations, it remains well within the prediction interval during such a volatile period. The Wall Street Journal forecast of 328,000 was closer to the result. Geographic Solutions, Inc. derives its employment forecast from internal data on the number of job searchers, job applications, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).

The unemployment rate remained the same at 3.6%, exactly at the Geographic Solutions forecast and above the WSJ forecast of 3.5%. The unemployment rate forecast used internal data on the number of job openings, job searchers, job applications, job severances, and the number of applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.

Job creation was strongest in Leisure & Hospitality (84,000), Professional & Business Services (75,000), and Education & Health Services (74,000). Job growth was flat to positive in all industries.

While Manufacturing employment did not emerge past its pre-pandemic level in May as expected, the Information sector did, joining Construction; Professional & Business Services; Trade, Transportation, & Utilities; and Financial Activities as one of the sectors that has recovered all jobs lost since the beginning of the pandemic. Leisure & Hospitality employment continues to grow but is the only sector to remain more than 3% below its pre-pandemic employment level.

Employment may be settling into a monthly pattern of 400,000 new jobs which can be expected to continue for a few more months. However, the labor market picture becomes murkier afterwards as consumers deplete savings accumulated from pandemic relief while wage increases are still below the rate of inflation.