November 2023 Market Trends Report
The U.S. economy added 150,000 jobs in October while the unemployment rate spiked to 3.9 percent, according to the U.S. Bureau of Labor Statistics (BLS) Employment Situation Summary.
While construction (+23,000) firms reported growth for employees on payrolls, losses were reported by manufacturing (-35,000) firms where the motor vehicles and parts subsector reported a loss of 33,200 jobs amid a strike by automotive manufacturers.
Job openings rise across industrial sectors
The latest Job Opportunities and Labor Turnover Survey (JOLTS) report, which runs a month behind the U.S. Bureau of Labor Statistics’ jobs report, reported that there were 9.6 million job openings on the last business day of September. Job openings spiked in all industrial sectors on the report including manufacturing (+23,000), construction (+56,000) and transportation, warehousing and utilities (+42,000).
Total separations, including quits, layoffs, discharges and other separations, changed little across the economy. Layoffs and discharges also have stabilized across industrial sectors, according to the latest JOLTS report.
Jobs Market Overview: October 2023
Overall Unemployment Rate
It is the 20th consecutive month of keeping the unemployment rate below 4%
October marked the 34th consecutive month of job gains.
Labor Force Participation Rate
The labor force participation rate remains below its pre-pandemic level of 63.4%
Industry Employment Trends
Monthly Job Change
(+1.9% YoY Difference)
|Industry||Monthly Job Change||YoY Difference|
|Warehousing & Storage||-11.4k||-4.0%|
|Architectural & Engineering||+2.6k||+3.3%|
Source: Bureau of Labor Statistics, Employment Situation Summary (bls.gov/news.release/empsit.nr0.htm)
Sector by Sector: October 2023
Global manufacturing “remained in the doldrums in October,” according to the latest JPMorgan Global Manufacturing Purchasing Managers' Index. The PMI registered 48.8, down from 49.2 in September to indicate a deterioration in business conditions for a fourteenth successive month.
According to S&P Global Market Intelligence, factory employment fell worldwide for a second successive month at the start of the fourth quarter, dropping at a rate not seen since August 2020. Barring the early pandemic months, the drop in headcounts was the steepest since September 2009.
In the United States, manufacturing employment fell by 35,000 with the large share of losses coming from those manufacturing motor vehicles and parts. Many labor analysts attributed that loss to strike activity. Luckily, earlier this week General Motors and the United Auto Workers (UAW) struck a tentative deal to end ongoing strikes impacting workers at the Detroit Three automakers.
As job openings spiked in the construction sector, so did employment according to the latest labor data. On a year-over-year basis, industry employment has increased by 219,000 jobs, an increase of 2.8%.
“The construction industry added jobs for the seventh consecutive month in October,” said ABC Chief Economist Anirban Basu in a news release on November 3. “Over the past year, hiring has been concentrated in the nonresidential segment, with especially strong employment growth in the nonresidential building category. This is in large part due to the unprecedented surge in manufacturing megaprojects… While contractors’ demand for labor remains robust, the rising cost of labor, pushed upward by worker shortages, remains a pressing issue for the industry.”
Basu’s remarks came as ABC announced its Construction Backlog Indicator found that backlogs declined to 9.0 months in September from 9.2 months in August.
More than half of employers (52.2%) intend to increase their staffing levels over the next six months and fewer than 7% intend to downsize, according to ABC’s Construction Confidence Index.
Warehousing & Storage
After falling below 1.9 million employed this summer for the first time since February 2022, the warehousing & storage sector has struggled to rebound. In October, the sector reported another loss of 11,400 jobs.
On the bright side, the Logistics Manager Index reported a 52.4 rating in September, marking the second consecutive month of expansion following three straight months of contraction.
“This second consecutive expansion provides further evidence suggesting that the move towards growth in August was not a one-off occurrence and may have marked a turning point back towards growth in the logistics industry,” a release announcing the latest LMI readings said.