Written By: Michael Gardon
The Headline
- The economy added 150,000 jobs in October 2023; the unemployment rate held at 3.9%
- The average hourly wages rose by 0.2% (7 cents) to $34
- Labor productivity increased by 4.7% in Q3 2023
- The labor force participation rate was little unchanged at 62.7%
What We’re Watching
Employment Trends
Non-farm payrolls added 150,000 jobs in October against economists’ predictions of 180,000 jobs gained. The Bureau of Labor Statistics’ monthly jobs report also revised tallies for August and September to reflect 101,000 fewer jobs added than previously reported.
The softer labor marker last month reflected the effects of the UAW’s strike on manufacturing employment, as well as SAG-AFTRA’s strike on motion picture and sound recording employment. However, employment was soft in other sectors like leisure and hospitality and professional and business services, which did not experience widespread labor disputes in October.
The labor force participation rate and employment-to-population ratio were little changed at 62.7% and 60.2% respectively. Both metrics remain below pre-pandemic levels.
The unemployment rate ticked up to 3.9%. The economy added jobs in healthcare (+58,000 jobs), government (+51,000 jobs), construction (+23,000 jobs), leisure and hospitality (+19,000 jobs), social assistance (+19,000 jobs), and professional and business services (+15,000 jobs).
Manufacturing shed 35,000 jobs in October, while transportation and warehousing and information declined by 12,000 jobs and 9,000 jobs, respectively.
Employment was little changed in several industries, including mining, wholesale trade, retail trade, and financial activities.
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Employment was little changed in several industries, including transportation and warehousing, information, mining, construction, manufacturing, wholesale trade, retail trade, and financial activities.
Other Ways to Measure Unemployment
The unemployment rate measures the percentage of the labor force that doesn’t have a job, has actively looked for work in the past month, and is available for work. People who are out of work but aren’t looking for jobs or able to take them are not counted in this tally. Retired people, stay-at-home parents, students, etc., don’t count toward the official unemployment rate.
To get a sense of the real unemployment rate, it’s helpful to look at the Bureau of Labor Statistics’ Alternative Measures of Labor Underutilization. This tally includes marginally attached workers and those working part-time for economic reasons.
As usual, the labor underutilization rate for September was a little less than twice the official unemployment rate: 7.2% vs. 3.9%. However, that’s a big improvement on pandemic numbers, which showed labor underutilization rates as high as 22.9% (April 2020).
Hiring
The Bureau of Labor Statistics tracks the number of job openings, hires, quits, layoffs, and other separations from employment as part of its Job Openings and Labor Turnover Summary (JOLTS).
The most recent data is from September 2023, so it doesn’t reflect the most recent fluctuations in the job market. Because of that lag time, this series is most useful as a means of understanding the job market two months ago.
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The number of job openings was little changed at 9.6 million in September. Hires (5.9 million) and separations (5.5 million) also changed little over the month. Quits and layoffs were also essentially flat at 3.7 million and 1.5 million, respectively.
Wage Growth and Productivity
Average hourly earnings increased by 7 cents to $34 in July 2023 and 4.1% over the past 12 months, according to the BLS. The Consumer Price Index rose 0.4% from September to October, contributing to a 0.2% decrease in real average hourly earnings. The average workweek was unchanged, while real average weekly earnings declined by 0.2%.
Labor productivity increased by 4.7% in Q3 2023. Output increased by 5.9%, while hours worked increased by 1.1%.
Freelance, Self-Employment, and Remote Work
Self-employment grew during the pandemic, reaching almost 11% of 157 million employed U.S. workers by April 2020, per Bureau of Labor Statistics data. Three years later, however, the share of workers who reported being self-employed had declined close to pre-pandemic levels. In April 2023, 10.03% of workers worked for themselves.
Remote work also appears to be on the decline for W-2 employees. By September 2022, 72.5% of businesses reported little or no remote work, according to the BLS, down from 60.1% a year earlier. The share of companies with an entirely remote workforce increased slightly at 11.1%, per this data.
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Job Market By State 2023
Unemployment declined in 32 states from September 2022 to September 2023 and increased in 14 states, the District of Columbia, and Puerto Rico. The unemployment rate was flat in four states.
Wages grew in all 50 states, Puerto Rico, and the U.S. Virgin Islands from March 2022 to March 2023, according to the most recent data from the BLS. Alaska saw the highest wage growth (+10.3%), followed by Puerto Rico (+10.2%) and Idaho (+10.1%).
Average Weekly Wage By State
Unemployment Rate By State
Job Market By Sector 2023
Want a high-paying, secure job? For now, it appears that healthcare is a safer bet than tech. Although the BLS includes plenty of technology jobs in its tally of the fastest-growing six-figure occupations, layoffs are concentrated in the tech sector. Meanwhile, occupations like typist (-38.2%), parking enforcement officer (-37.1%), and watch repairer (24.7%) are in decline—replaced by software and other automated technologies.
Fastest growing occupations, 2021 and projected 2031 (Numbers in thousands)
Top 20 industries with highest wage growth (2019 - 2021)
Source: U.S. Bureau of Labor Statistics, Current Employment Statistics
For more, check out CareerCloud’s list of the Highest Paying Jobs.
Fastest declining occupations, 2021 and projected 2031 (Numbers in thousands)
Unemployment Rate By Sector, Not Seasonally Adjusted
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