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 Sink with Meta, Microsoft: Stock Market TodayAlphabet was a bright light among the Magnificent 7 stocks today after the Google parent's quarterly revenue topped $100 billion for the first time.
-
The Original Property Tax Hack: Avoiding The ‘Window Tax’Property Taxes Here’s how homeowners can challenge their home assessment and potentially reduce their property taxes — with a little lesson from history.
-
Stocks Sink with Meta, Microsoft: Stock Market Today
Alphabet was a bright light among the Magnificent 7 stocks today after the Google parent's quarterly revenue topped $100 billion for the first time.
-
Is Mint Mobile's Home Internet a Game-Changer or Just Another Option?Mint Mobile recently unveiled its new home internet service. We break down how it works so you can determine if it's a great value for your needs.
-
How to Add Your Driver’s License or State ID to Google WalletStore and use your digital ID securely on your Android device for TSA, age verification and more.
-
Five Downsides of Dividend Investing for Retirees, From a Financial PlannerCan you rely on dividend-paying stocks for retirement income? You'd have to be extremely wealthy — and even then, the downsides could be considerable.
-
Dow, S&P 500 Slip on December Rate Cut Worries, Nvidia Boosts Nasdaq: Stock Market TodayNvidia became the first company ever to boast a $5 trillion market cap, but it wasn't enough to lift the Dow and the S&P 500.
-
Where You Choose to Stash $100k Now Comes with a Big Opportunity CostThe Fed recently cut rates. Here's where to maximize your savings while rates remain higher.
-
The Social Security Earnings Test: Know This Rule Before Working in RetirementWhen you work and collect Social Security benefits before your FRA, you are subject to the Retirement Earning Test that could result in a temporary reduction of your benefits.
-
I'm a Government Employee and Need to Get By Until the Shutdown Ends. What Can I Do?The second-longest shutdown in history is leaving many federal workers with bills due and no paycheck to cover them. Here's what you can do to get by.
