A Jobs Rebound? What to Watch in Friday’s Jobs Report

The American economy lost jobs last month for the first time in seven years, in the wake of storm devastation from Hurricanes Harvey and Irma. That ended a remarkable 83-month streak of consecutive job gains, which was the longest on record since the 1930s. What should we expect next in Friday’s jobs report for October? Here’s what we’re watching for:

• +49,000 new jobs added to nonfarm payrolls in October;
• Unemployment rate unchanged at 4.2 percent;
• Average hourly earnings up 2.6 percent from one year ago;
• Labor force participation rate down slightly to 63.0 percent.

Watch for Revisions

The BLS surprised many analysts last month by reporting the economy shed -33,000 jobs in September. That was largely due to the devastating, although temporary, impact of Hurricanes Harvey and Irma which disrupted the BLS’s ability to survey work and hiring throughout the nation’s southeast in September. The good news is those job losses will almost certainly be revised upward in coming months. As BLS’s survey teams collect additional responses, last month’s figures will be massaged to reflect better estimates. It’s no surprise that BLS surveys have trouble getting an accurate read on the economy at a time when thousands of businesses and homes are struggling to meet basic needs and recover from historic storm damage. Some clues about what’s ahead come from jobs reports that followed Hurricane Katrina in 2005. That storm made landfall in September 2005, and the initial BLS jobs report showed the economy lost -35,000 jobs that month -- nearly identical to last month’s report. In subsequent months, those figures were revised dramatically upward. The table below shows the initial BLS estimate of job losses in September 2005 along with the revisions that followed: -35,000 job losses initially, revised to -8,000 job losses, then to +17,000 job gains, and ultimately a final estimate of +67,000 jobs added. Changing Fortunes: -35,000 Job Losses After Hurricane Katrina Were Later Revised Up to +67,000 Job Gains

Change in Nonfarm Payrolls	September 2005	October 2005
Initial Estimate (September 2005 Jobs Report)	-35,000	--
1 Month Later (October 2005 Jobs Report)	-8,000	+56,000
2 Months Later (November 2005 Jobs Report)	+17,000	+44,000
Final Estimate	+67,000	+84,000

Source: BLS (https://www.bls.gov/bls/news-release/empsit.htm). On Friday, expect a similar pattern of upward revisions for the September estimates, as well as weak October job gains. Based on the experience after Hurricane Katrina in 2005, we expect to see roughly +49,000 jobs added in October, as well as an upward revision of last month’s job losses to around -5,000 jobs.

Hot Industries for Job Growth Today?

October marks a milestone for the economy: 100 months of steady economic growth since the end of the Great Recession. On that occasion, we did a deep dive into what industries in America today are adding jobs at the fastest pace -- and which sectors are losing jobs. Here’s what we did: We looked at total employment by industry from BLS figures, and calculated the percentage gain or loss in total jobs in each sector over the past few years: from January 2015 through September 2017. The table below shows 15 industries that are seeing some of the fastest job growth in America today. Here’s what we found:

• The number one industry adding jobs is warehousing and storage. That sector has experienced a staggering 23 percent gain in jobs since January 2015. The main cause? Rapid expansion of online retail giants Amazon and Walmart.
• Four industries in the healthcare sector are also seeing rapid growth: outpatient care centers (+17 percent); offices of health practitioners (+14 percent); individual and family services (+11 percent); and emergency and relief services (+11 percent). With aging Baby Boomers looking for more and better health services, healthcare is experiencing a tremendous jobs boom today.
• Other top industries for job gains include

All of these booming sectors are a sign of the times in the U.S. economy today, reflecting many of the broader economic trends we’ve seen unfold in recent years. America’s Booming Industries: Fastest Job Growth Since January 2015

Industry	Percent Job Growth	Reasons Why?
Warehousing and storage	23%	Growth of Amazon and Walmart.
Outpatient care centers (health care)	17%	Booming health care spending.
Miscellaneous nondurable goods manufacturing	17%	Small-scale, agile manufacturing.
Management and technical consulting services	16%	Consulting services on the rise.
Other information services	16%	Cloud computing and data services.
Offices of health practitioners (health care)	14%	Booming health care spending.
Office administrative services	14%	Outsourcing office and facilities jobs.
Nonstore retailers	13%	Growth of smaller online retailers.
Other professional and technical services	12%	Consulting services on the rise.
Residential specialty trade contractors	12%	Housing-related construction boom.
Museums, historical sites, etc. (tourism)	12%	Expanding tourism and leisure.
Computer systems design and related services	11%	Expanding tech hiring.
Residential building	11%	Housing-related construction boom.
Individual and family services (health care)	11%	Booming health care spending.
Emergency and relief services (health care)	11%	Booming health care spending.

Source: BLS (https://www.bls.gov/ces/). Unfortunately, the jobs outlook is not as rosy for many other U.S. industries. The table below shows 15 industries that have lost jobs at the fastest pace since January 2015. Here’s what we found:

• Two industries suffering the most severe job losses are both in the mining sector: support activities for mining (-29 percent job losses), and coal mining (-24 percent job losses). Those massive job cuts reflect broader trends in America’s energy sector, as it shifts away from coal-fired power and manufacturing facilities toward lower-cost and cleaner natural gas and renewable wind and solar energy sources.
• Other industries suffering big job losses today include:

America’s Ailing Industries: Fastest Job Losses Since January 2015

Industry	Percent Job Growth	Reasons Why?
Support activities for mining	-29%	Layoffs due to low energy prices.
Coal mining	-24%	Layoffs due to low energy prices.
Rail transportation	-16%	Jobs shifting from rail to trucking.
Apparel (manufacturing)	-16%	Declining manufacturing jobs.
Miscellaneous computer and electronic products	-10%	Disruption from online retailers.
Oil and gas extraction	-9%	Layoffs due to low energy prices.
Broadcasting, except Internet	-7%	Weakness in media sector.
Telecommunications	-7%	Disruption from mobile and cellular.
Logging	-6%	Logging industry on the decline.
Textile mills (manufacturing)	-6%	Declining manufacturing jobs.
Textile product mills (manufacturing)	-5%	Declining manufacturing jobs.
Communications equipment	-5%	Weakness in media sector.
Department stores	-5%	Disruption from online retailers.
Sporting goods, hobby, book, and music stores	-4%	Disruption from online retailers.
Machinery	-3.5%	Declining manufacturing jobs.

Source: BLS (https://www.bls.gov/ces/). Although the top-line numbers show a healthy economy, there’s a lot of diversity among industries in America today: while healthcare, tech, and professional services are booming, thousands of workers in the energy, manufacturing, and telecom sectors face a dismal economic outlook. That’s a healthy reminder that even during the best times, it’s important to offer empathy and a helping hand to those Americans who find themselves working in declining sectors that aren’t sharing equally in today’s broader economic prosperity. To speak with Dr. Andrew Chamberlain about this month’s jobs report or labor market trends, contact pr [at] glassdoor [dot] com. For the latest economics and labor market updates, subscribe to email alerts here and follow @adchamberlain.