August Jobs Report Preview: A Less Disruptive Labor Market
This Friday’s jobs report for August follows several strong months. Job growth in the past quarter is ahead of the 2016 pace and way ahead of what’s needed to keep up with population growth. Working-age adults are now more likely to be employed than at any time since the recession, with the prime-age employment-population ratio back to its 2008 level.
In fact, the job market is having a moment of unusual stability. Sure, there are concerns about robots stealing manufacturing jobs, or Amazon destroying traditional retailers. But relatively few industries are actually shrinking. In July, just 55 thousand jobs were lost in declining industries, rivaling the mildest level in years. In 2017 to date, 87 thousand jobs per month, on average, have been lost in shrinking industries, compared with 104 thousand per month in 2016. (See orange line in chart below.) Job gains in growing industries are falling, too, with an average gain of 272 thousand in expanding industries in 2017, down from 291 thousand in 2016. (Blue line in chart.)
The combination of fewer job gains in growing industries and fewer job losses in shrinking industries means more stability. In other words, the job market has seen fewer extremes of booming or contracting industries in recent months. For workers, this means less disruption. But for the economy overall, more disruption might be a good thing if it reflects or even spurs productivity growth.
Over recent decades, economists have been concerned with the decline in dynamism. Fewer people are moving today than in the past, and firms are both creating and destroying fewer jobs than they used to. Even with the rapid pace of current technological innovation, the mix of jobs in today’s economy is changing much more slowly than it did in the 1940s and 1950s.
Still, some industries and their workers face real pain. The ten industries that have had the steepest job losses in the past year include apparel manufacturing and textile mills, which face competition from imports; telecoms, movies, and broadcasting; and retail industries that compete most directly with online stores.
As always, this Friday we’ll be looking closely at the jobs report, beyond the headline numbers. Watch for tweets at @jedkolko.