Unemployment Rate Forecast

Economic Forecasts

Job Gains Slowing, Unemployment Dropping

Kiplinger’s latest forecast on jobs

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GDP 2019 growth will be 2.3%; 1.8% in 2020 More »
Jobs Job gains of about 170,000 per month in ’19 More »
Interest rates 10-year T-notes staying around 2% until trade war ends More »
Inflation 2.1% in ’19, up from 1.9% in ’18 More »
Business spending Up just 2% in ’19 amid uncertainty of trade war More »
Energy Crude trading from $50 to $55 per barrel in December More »
Housing 3.5% price growth by year-end ’19 More »
Retail sales Growing 4.3% in ’19 (excluding gas and autos) More »
Trade deficit Widening 7% in ’19 More »

Only 128,000 jobs were added in October, but that total was held down by a General Motors strike that reduced the tally of new jobs by 50,000. Ignoring the strike, job gains were stronger than expected, with almost all industries seeing expansion. An average of 47,000 more jobs, mostly in retail and food service, were added to each of August and September’s totals. Also, the GM strike has ended, so November’s job total should jump by well over 200,000.

Monthly job growth in 2020 is likely to average 150,000 jobs per month, down from 170,000 in 2019 and 223,000 in 2018. Partly, that is because there are fewer available workers to hire, given the low unemployment rate. But the smaller gains will also signal that the economy is slowing down to a more moderate growth rate. The tax cut stimulus to growth couldn’t last, and the trade war with China is keeping exporters and commodities-oriented industries from expanding.

The positive takeaways from the report: Wage growth for nonsupervisory workers stayed fairly high at 3.5%. The share of prime-age workers (ages 25 to 54) who are employed is the highest since 2010. Retail has added workers in the past two months after eight straight months of declines caused by store closures. The negative: 11 of 19 manufacturing industries lost jobs, showing the impact of slowing exports. The telecom sector continues to shrink.

The unemployment rate edged up to 3.6%, still near its lowest level since 1969. Job openings continue to exceed new hires. The short-term unemployment rate (which tracks folks who have been unemployed for less than six months) is close to its lowest level since the Korean War in 1953.