US employment market keeps on shining

WASHINGTON: In an economy growing at a moderate pace at best, the United States job market keeps on shining.

Payroll gains topped forecasts in five of the past seven months, putting the average increase of 184,000 this year almost on par with last year’s 187,000 and above levels typical for the eightyear expansion.

Analysts expect barely any falloff from that pace last month’s figures due on Friday, amounting to job growth about double what’s needed to keep the unemployment rate steady in the longer run.

Sustained demand for workers — highlighted by record vacancies — is pushing down unemployment and even attracting Americans who weren’t actively looking for a job.

What’s more, the strong run of hiring challenges a widespread assumption in forecasts late last year: that the economy would run low on workers as it approached so-called full employment, causing payrolls to downshift.

A confluence of reasons helps explain the outperformance, including steady consumer spending; bullish business sentiment on hopes President Donald Trump will cut taxes and boost growth; stabilisation in oil prices; and improving export markets.

Moreover, weak wage gains suggest employers are adding workers instead of investing in technology, something reflected in sluggish productivity. Recent hiring has been driven by typically low-paying industries such as restaurants, home healthcare services and leisure.

“There is enough supply of labour to keep hiring growing at a fairly robust pace,” said Michael Gapen, Barclays Plc’s chief US economist, who projects payrolls grew 200,000 last month.

There was also still plenty of demand for workers in this “slow but super-durable expansion”, he said.

Employment probably rose by 180,000 last month after 209,000 in July, according to the median estimate in a Bloomberg survey ahead of the Labour Department’s data.

One caveat: Last month’s employment tends to come in below expectations due to difficulty adjusting data for the new school year. In the initial report, last month’s hiring missed expectations each of the past six years, only to be revised upward in five of those.

The Bloomberg survey projects the jobless rate held at a 16-year low of 4.3 per cent last month. The data also won’t show any fallout from Harvey, as the Labour Department’s payrolls survey week, which includes the 12th of a given month, closed before the hurricane hit Houston on August 25. Bloomberg