The US economy created half a million fewer jobs last year than previously thought
The nation’s job market is strong — just not quite a strong as previously believed.
The Labor Department is revising down the number of jobs that employers added to payrolls by 501,000 during the 12-month period that ran from April, 2018 through March of this year. The government initially estimated the economy added 2.5 million jobs during those 12 months, or just over 200,000 a month. Now it appears it will be closer to 170,000 a month on average.
The government makes these revisions on a regular basis as it gets more detailed data from employers that it uses to publish monthly jobs estimates. This is a preliminary revision. A final revision for this 12-month period is due to be released in February.
The labor market has been the bedrock of strength in a US economy which has been beset by fears of a looming recession in recent weeks. Unemployment remains near a 50-year low. There are more job openings than there are unemployed people looking for a job. Surveys show workers are confident about the job market, and data shows them willing to quit their current jobs, another sign of confidence. And that confidence is important for keeping consumers spending and the economy out of a recession.
The new figures don’t suggest the job market is weak. A monthly gain of 170,000 jobs is enough to keep unemployment at its current low level. But it’s not quite as hot as previously believed, and risks that unemployment will start to rise if employers slow their pace of hiring any further.
This revision shows that the battered retail sector, hit by store closings and a shift of shoppers to online purchases, cut far more jobs than the previous estimate. The government previously believed retailers cut 32,500 jobs in the period. Now it puts that loss at nearly 180,000 jobs.
But it’s not just job losses causing the downward revision. It’s also other sectors not growing as fast as previously believed.
The leisure and hospitality industry, which includes hotels, restaurants, sports teams and theaters, was initially estimated to have added 434,000 jobs. Now it appears it added only about 260,000 jobs.
Business and professional services, a catch-all category that includes everything from accountants and lawyers to waste management and temporary workers, added 163,000 fewer jobs under the revision.
But there were some areas that added more jobs than previously thought.
Transportation and warehousing, a segment helped by the same shift to online purchases that is hurting traditional retailers, added about 80,000 more jobs than previous estimates. Finance and information services added 53,000 additional jobs and various levels of government at the local, state and federal level added 13,000.