Updated Mar 9, 2019

An end to the jobs party

Data: Bureau of Labor Statistics; Chart: Axios Visuals

A plunge in U.S. jobs growth suggests that the party is nearing its end for American workers, who have enjoyed their best employment conditions in a half-century.

What's happening: At 20,000 new jobs, reported Friday by the Labor Department, the economy produced far fewer positions last month than required to absorb 60,000–80,000 new entrants to the workforce, such as high school and college graduates.

  • The numbers come amid a remarkable economic expansion: The U.S. economy has produced jobs for 101 consecutive months. And the economy has expanded for 117 months.
  • And some economists suggest that no one panic: They note, for instance, that the 3-month average of job creation is still high, at about 186,000. And, as Axios' Courtenay Brown reports, wages rose 3.4% from February 2018 — the best pace in a decade.

But February's anemic employment number dovetails with other, worrying new data from jobs websites that are close to the market:

  • Job cuts rose in February: Layoffs were up 45% over January and 117% over February 2018, according to Challenger, Gray & Christmas, the job recruitment firm. It was the highest month-on-month cuts since July 2015.
  • Hiring slowed: Over the last 3 months, gross hiring was 2.9% lower than in the same period a year ago, according to LinkedIn. Among the industries on the decline — construction, health care and manufacturing.
  • Wage increases shrank: Amid the tightest job market in a half-century, wage increases declined year-on-year last month to just 1.3%, down from 2% in January, according to Glassdoor, the jobs listing website.

The big picture: What we are watching is jobs following the economy. Joe Brusuelas, chief economist at RSM, says economic growth is below 1% in the current quarter and job expansion is slowing, too. "I think that the sizzle has gone out of the steak," he tells Axios.

Daniel Zhao, an economist with Glassdoor, calls it "an inflection point."

  • Wage growth seems likely to stay where it is or fall, Zhao said.
  • "Job growth on overdrive — those days are gone," said Dan Roth, editor-in-chief at LinkedIn.

The bottom line: After decades of largely flat wage growth, driven by a jobless rate under 4%, workers have finally been receiving real month-on-month pay increases. The February jobless rate was still rock bottom — at 3.8%. No one today changed their longer-term economic forecast. But the new data suggest that the good times have peaked.

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