State of the Labor Market

September Jobs Report: Sinking Retail (Not the Weather) Contributed to Dip in Payroll Growth

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Retail trade had a strong first half of the year, but has slowed down in recent months.

We can clearly point to a slowdown in retail trade for the dip in payroll numbers in September. Excluding mining and logging, construction, and leisure and hospitality, payroll numbers still came in low, suggesting that weather may not have played a large role in the low number this month. Retail trade had a strong first half of the year, but has slowed down in recent months. In addition, recent Hiring Lab research saw a slight dip in the number of holiday retail postings, suggesting that the sector may struggle in months to come.  The payroll number should not cause too much angst – we have had more than 20 months in this recovery with a lower payroll number than this month’s figures.

On the worker side, the percentage of the population in their prime working years with a job held around 79.3%, where it has been for about eight months. The steadying in that measure suggests that the number of workers left to pull into the labor force may be stalled out. The share of the labor force working part-time but who wants a full-time job unfortunately ticked up. Any remaining slack in the economy may be concentrated in part-time workers who want more hours.

Finally, wages ticked down to 2.8%, but given the volatility in that measure, we should not be concerned that workers won’t see accelerating wage growth in coming months.

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