Weekly Economic Trends and Indicators
The Headline:
The Bureau of Labor Statistics recently released local labor market statistics for the month of September. For the Quad Cities metro area, the civilian labor force was 191,400 (up 500 since August). The number of employed persons was 181,800 (down 400 since August). The number unemployed was 9,600 (up 900 since August), and the unemployment rate was 5.0 percent (up from 4.6 percent in August). The total number of payroll jobs increased by 800 from August to September for a total of 185,800. These values are not seasonally adjusted.
The Details:
Most categories of jobs were unchanged to slightly lower in September except for government, which increased by 1800 jobs. This brings the government sector essentially back to its pre-pandemic level. Leisure and hospitality jobs decreased by 1100 which is normal at the end of the summer. Twelve-month percentage changes for all major categories of jobs continued near their recent trends.
The Context:
This month’s local labor market report can best be described as mixed. On the positive side, we have an increase in the labor force, which has been extremely slow to recover after the pandemic. A return to the 2017 level of the labor force would be a good benchmark for “normal” times. While we are still about 4000 lower than that, we continue to move slowly in the right direction.
The rise in unemployment is the negative side of this report. However, this is not unusual for this time of year. The question is whether there are other signs in the market that are concerning. Looking at the data for Iowa and Illinois in the Job Openings and Labor Turnover Survey (JOLTS), we see a clue. Hires are trending down slightly, and separations are roughly unchanged. However, job openings have been trending down significantly, and that makes sense given the overall labor market picture we have been seeing.
The decrease in job openings along with the slightly lower hires and unchanged separations mean that it will take longer for job changers and new entrants to find a job that is a good match. This raises the unemployment rate.
It is also possible that some people who left the payroll labor market for the “gig economy” after the pandemic are once again looking for more stable payroll employment and finding it more difficult to find that job than at this time last year. Again, this could cause the number unemployed and the unemployment rate to rise even while payroll jobs are steady or slightly higher. It will take a few months to see whether this is just a transition to a more stable number of job openings or a genuine slowdown of the economy. Pay close attention to job separations as well as to job numbers in sectors such as manufacturing, transportation, and professional and business services for early signs that this is more than just a transient adjustment process.
Next week: Inflation update
