Kiplinger’s Economic Outlooks are written by the staff of our weekly Kiplinger Letter and are unavailable elsewhere. Click here for a free issue of The Kiplinger Letter or to subscribe for the latest trends and forecasts from our highly experienced Kiplinger Letter team.
No official payroll employment data are available during the government shutdown, but it appears that hiring may have picked up slightly in September, after only 22,000 jobs were added in August. Guesstimates are that 50,000 jobs were added in September. When released, October data is likely to show a net job loss, given that 100,000 or so federal workers who took buyouts earlier in the year will be removed from the federal job rolls for the first time.
Data that are available appear to indicate a leveling off, rather than further deterioration. State initial unemployment claims excluding government workers have not picked up, and WARN notices, which are required when companies are announcing large layoffs, have not risen, either. But Indeed.com job postings, which tend to track the official job openings data, have continued to trend down. That indicates the current low hiring environment is likely to continue.
Few sectors appear to be adding jobs outside of health care and social assistance. The unemployment rate has likely edged up to 4.4%, and the length of time workers are staying unemployed on average likely remains elevated, as is the number who are forced to work part-time because of poor economic conditions. The unemployment rate is likely to continue to edge up through the first half of next year, peaking at 4.7% before retreating to 4.5% by year-end 2026.
Wage growth was reported in August to be 3.7% at an annual pace, and is expected to slow to 3.5% by the end of the year. Wage growth tends to lag other labor market indicators.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Consumer and business uncertainty about the economy will continue to delay hiring plans and should slow future pay gains. Hiring is often deferred when consumers are concerned about losing their jobs, or when businesses don’t know if there will be a positive return to investing in additional workers. Prior to the tariffs, we expected monthly job growth of about 150,000 new positions to continue. Now, job growth could disappear almost entirely if enough employers decide to hold off on hiring while they sort out the effects of the new tariffs on both their businesses and on the economy as a whole.
The payroll employment release is important to the Federal Reserve for two reasons: First, one of the Fed’s two mandates is to support employment. Second, employment is a more reliable indicator of recession than the initial GDP estimates. The Fed needs accurate employment numbers to tell it when to either step on the gas or hit the brakes by cutting or raising interest rates. Currently, the Fed is expected to stay on the gas at its policy meetings on October 29 and December 10 with quarter-point cuts, based on the current best guess that job market weakness is continuing.
Related Content
-
Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market TodaySHW and UNH were two of the best Dow Jones stocks Tuesday, thanks to solid earnings reports, and MSFT closed with a $4 trillion market cap.
-
Selling Your Haunted House? What You Have to Tell Buyers (and What You Don’t)You don’t need ghosts to spook buyers, sometimes a home’s past is enough. Here’s what sellers should know about disclosure laws, pricing and perception when a property has a haunted history.
-
Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market Today
SHW and UNH were two of the best Dow Jones stocks Tuesday, thanks to solid earnings reports, and MSFT closed with a $4 trillion market cap.
-
CMS Brings Back Furloughed Staff for Medicare Open Enrollment LifelineThe government has recalled approximately 3,000 workers to assist with Medicare and ACA Marketplace Open Enrollment.
-
Targa Resources, Take-Two Interactive, Boston Scientific: Why Experts Rate These Stocks at Strong BuyWall Street is highly bullish on these three high-quality stocks.
-
Debunking Three Myths About Defined Outcome ETFs (aka Buffered ETFs)Defined outcome ETFs offer a middle ground between traditional equity and fixed-income investments, helping provide downside protection and upside participation.
-
This Is Why Judge Judy Says Details Are Important in Contracts: This Contract Had HolesA couple's disastrous experience with reclaimed wood flooring led to safety hazards and a lesson in the critical importance of detailed contracts.
-
US-China Trade Hopes Send Stocks to New Highs: Stock Market TodayApple and Microsoft are on track to join Nvidia in the $4 trillion market cap club.
-
A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and AroundIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
