Job Growth Was Weaker Than Believed, Government Says

Employers added a half-million fewer jobs in 2018 and early 2019 than previously reported, the Labor Department said Wednesday.

The revisions, which are preliminary, are part of an annual process in which survey-based estimates are brought into alignment with more definitive data from state unemployment insurance records. Wednesday’s revision covers the period through March; final updates, which will include the rest of 2019, will be released in February.

The revisions don’t change the overall picture of a healthy job market. But they do mean that 2018, which had ranked among the strongest years of job growth in the decade-long recovery, was weaker than previously believed. After the revision, hiring probably averaged under 200,000 jobs per month last year, down from the 223,000 initially reported and only modestly better than the 179,000 monthly jobs added in 2017.

Wednesday’s update is also the latest evidence that the economy got less of a jolt from President Trump’s tax cuts than it initially appeared. Last month, the Commerce Department lowered its estimate of economic growth in 2018.

The revisions hit consumer-oriented industries particularly hard. Retailers cut nearly 150,000 more jobs than initially reported, while hiring in leisure and hospitality — which includes restaurants, hotels and entertainment — was significantly weaker than believed. But the transportation and warehousing sector, which has been booming because of the rise in online shopping, added nearly 80,000 more jobs than previously reported.

Wednesday’s revision was the largest in recent years, but it didn’t come as a total surprise. Many economists had expected job growth to level off in 2018 as the unemployment rate fell and employers struggled to find workers.

“The pace of job growth in 2018 was a significant upside surprise,” said Stephen Stanley, chief economist of Amherst Pierpont Securities, an investment firm. “The revision kind of brings things back into line with what the original thought process had been.”

Investors in recent weeks have become increasingly concerned about the possibility of a recession, and the Federal Reserve last month cut interest rates in an effort to stave off a downturn. Guy Berger, chief economist for the career-focused social network LinkedIn, said the recent revisions were a reminder that official statistics often struggle to pick up turning points in the economy until it is too late.

But Mr. Berger added that the evidence so far suggested that growth was cooling, not grinding to a halt.

“I don’t look at any of these things and say, ‘Wow, we’re on the tip of a recession,’” he said.

Source: NYT

Please follow and like us:
error