Apologies if you’ve heard this one before, but the jobs market is slowing down. No, really.
Aside from the long-standing calls for a recession to hit the U.S., the expectation for a hiring retreat is probably the most oft-heard — and, so far, incorrect — economic call of at least the last year.
True to form, the consensus Wall Street call is that the October nonfarm payrolls report, which the Labor Department is scheduled to release Friday at 8:30 a.m. ET, will show a sharp decline from September. Economists surveyed by Dow Jones are expecting growth of just 170,000, down from the shockingly high 336,000 the previous month and well below the 260,000 monthly average so far in 2023.
Don’t hold your breath looking for that big of a decline, said Amy Glaser, senior vice president at global staffing firm Adecco.
“This is going to be another surprising month. We’re still seeing resilience in the market,” Glaser said. “We’re still seeing a ton of positivity on the ground with our clients.”
Though long-standing trends such as aggressive job switching and big wage gains now show signs of reversing, hiring is still strong as employers look for incentives such as flexible work scheduling to bring in new talent, she added.
“Folks aren’t able to jump from one job to another and gain these huge, astronomical pay increases, which is good news for the employers,” Glaser said. “On the flip side, we’re seeing a return of the workforce … The folks coming off the bench are really going to make an impact over the upcoming months.”
Trends in labor force participation will be one metric worth watching closely when the report hits, as the participation rate is still half a percentage point below its pre-pandemic level. Here are a few more:
Average hourly earnings
Wages increased 4.2% from a year ago in September. That is expected to decrease to 4% for October. The earnings picture is an important component to inflation, and one policymakers will be viewing with a careful eye.
The Dow Jones…
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