October 2019 Jobs Day Preview: Middle-Wage Industries Are Leading the Employment Growth Slowdown
Industries in mining, transportation, and construction are major contributors to this year’s slowdown in the labor market.
The US labor market is slowing down. Not only is the labor market adding fewer jobs than last year, the slowdown has been concentrated in middle-wage industries that fall in broader sectors such as mining, transportation, and construction. Middle-wage jobs are projected to grow more slowly in the future, so the current slowdown may be the beginning of a long-run trend.
Employment growth has fallen across all three industry groups over the past year, but growth has pulled back the most in middle-wage industries. From September 2018 to September 2019, employment growth in these industries declined by 1.2 percentage points, compared to a slowdown of 0.4 percentage points for all employment growth.
The slowdown has been strongest in many goods-producing industries. Two mining industries — support activities for mining and nonmetallic mineral mining and quarrying — slowed considerably, and are now shrinking. Warehousing and storage employment growth has slowed from rapid rates last year, but is still expanding. And softness in the housing market may have contributed to a slowdown in growth for residential building construction jobs over the past year.
In the October report, I’ll be looking to see if:
- Wage growth for production workers continues to outpace growth for all workers,
- A still-strong labor market can further increase labor force participation for workers in their prime working years,
- And whether service-sector employment growth remains robust in the face of slowing growth in the goods-producing sector.
Nick Bunker is the Economic Research Director for North America at the Indeed Hiring Lab who focuses on the U.S. labor market. He was previously a Senior Policy Analyst at the Washington Center for Equitable Growth, an economics think tank. Prior to that, Nick was a Research Assistant at the Center for American Progress. He holds a B.S.F.S. in international economics from Georgetown University.