Job growth could slow in 2020, survey says
While still solid, job growth momentum has slowed from its breakneck pace at the end of 2018 and early 2019.
For the first time in 10 years, an even balance of businesses report gaining and losing employees—indicating that job growth might be on the way down from its peak.
So finds the National Association for Business Economics’ fourth-quarter business conditions survey, says Reuters, adding that the NABE report follows a January government report saying that job openings in November fell by the most in more than four years.
The survey, conducted between December 23 and January 8. reflects conditions in the fourth quarter and the near-term outlook. Drops in employment took place in the services, goods-producing, transportation, utilities, information, and communications industries. Gains occurred in the finance, insurance, and real estate sectors.
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“For the first time in a decade, there are as many respondents reporting decreases as increases in employment at their firms than in the previous three months,” said Megan Greene, NABE business conditions survey chair. “However, this may have been due to difficulty finding workers rather than a pullback in demand.”
While still “solid,” the report says, job growth momentum has slowed from its breakneck pace at the end of 2018 and early 2019.
In August of last year, the government estimated that the economy created 501,000 fewer jobs in the 12 months through March 2019 than previously reported. That’s the largest downward revision in the employment level in 10 years—suggesting that during that period, job growth averaged not 210,000 per month but more like 170,000 per month. In addition, economists expect job gains after March 2019 could also be revised lower.
The employment slowdown has been attributed to a range of factors, from the trade war with China to trade tensions and worker shortages. The percentage of companies reporting shortages in unskilled labor has increased “significantly,” while almost half cited shortages of skilled workers.
Greene added, “While most respondents suggest their firms have not felt much impact from the tariffs and countermeasures over the past year, respondents from goods-producing firms report their companies have experienced negative sales and higher costs.”
Still, businesses appear to be more optimistic about 2020, with 30 percent expecting the economy to grow between 2.1–3.0 percent—compared with just 20 percent back in October.
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