Strong Job Growth in 2018 Reflects Continued Strength in Manufacturing, Retail Rebound
A retail jobs bounce-back in 2018 has helped drive brisk job growth this year.
Average monthly job growth this year has come in at 215,000, above the pace over the same time period in the last two years. It is surprising that job growth has sped up at this point in an economic cycle. So which industries are driving the change? Manufacturing has continued the strong growth that sector has enjoyed since the beginning of 2017 — growing at almost double its 2017 first-half pace in the first-half of 2018. But the real story is retail.
After struggling throughout 2017 (particularly in the first half), retail trade has returned to solid job growth in 2018, averaging about 19,000 jobs a month higher than over the same period last year. In fact, the increase in retail trade is about two-thirds of the total nonfarm increase.
Looking at the detailed industry breakdown, the rebound in retail is concentrated in clothing and clothing accessories stores and department stores, suggesting that the pains the industry saw related to ecommerce last year may be slowing. In fact, nonstore retailers was actually the retail subindustry that saw the smallest change in its growth, largely holding steady from the first half of 2017 to the first half of 2018. Warehousing — an important employer for the ecommerce industry — also largely held steady.
On the other end of the spectrum, growth in leisure and hospitality has slowed over the last year, by about 16,000 jobs a month. The slowdown has been across the industry — museums and historical places and accommodation have done the best with a slowdown of only 1,000 jobs each, but food services and drinking places is down by 7,000 on average, performing arts and spectator sports by 4,000, and amusements, gambling, and recreation by 3,000.
This Friday, we’ll be looking to see whether or not payroll growth continues to outpace recent years, and whether retail trade and manufacturing continue their upward trend in job growth.