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Economic Forecasts

Strong Jobs Growth Continues

Kiplinger's latest forecast on jobs

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GDP 1.6% growth for the year; a 2.1% pace in '17 More »
Jobs Hiring pace should slow to 160K/month in '17 More »
Interest rates 10-year T-notes at 3% by end '17 More »
Inflation 2.4% in '17, up from 2.1% in '16 More »
Business spending Slight gain in '17 after flat '16 More »
Energy Crude oil trading from $50 to $55 per barrel in March More »
Housing Single-family starts up 9% in '16, 11% in '17 More »
Retail sales Growing 3.9% in '17 (excluding gas) More »
Trade deficit Widening 4% in '17, matching increase in '16 More »

The labor market is hitting on all cylinders right now. The 156,000 added jobs were from across the spectrum, with strong growth in health care and hospitality, and decent numbers in manufacturing and government. The number of persons who were working part-time because of slack business or couldn’t find a full-time job continued to decline, along with the number of long-term unemployed individuals.

Look for the job market to continue tightening next year as demand for skilled workers exceeds their availability. Employment growth in 2017 will slow to an average of 160,000 jobs per month, from 180,000 per month in 2016, but the unemployment rate will edge down further to 4.5%. The four-week average of initial unemployment claims is close to its lowest level since 1973, keeping the inflow of newly unemployed at a low level.

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It’s a positive sign that the unemployment rate ticked up to 4.7%. That means more folks outside the labor force came back in to look for work and so were newly classified as unemployed.

Wage gains picked up to a 2.9% growth rate, the highest since 2009. Wages will be on an upward trend this year, given the tightness of the labor market, and will continue to provide fuel for consumer spending growth going forward.

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Previously strong growth in the labor force will likely diminish going forward. Many folks who had given up looking for work have already started to do so again. Some of those still on the sidelines may not be interested in coming back.

SEE ALSO: The Best Jobs for the Future

Source: Department of Labor, Employment Data