September 2023 Market Trends Report
The U.S. economy added 187,000 jobs in August while the unemployment rate spiked to 3.8 percent, breaking out of its 17-month streak between 3.5 and 3.7 percent, according to the U.S. Bureau of Labor Statistics (BLS) Employment Situation Summary.
In the same month, construction (+22,000) and manufacturing (+16,000) firms reported growth for employees on payrolls while warehousing and storage firms’ employment stayed stagnant (-600) in August. Meanwhile, the architectural and engineering sector reported a rise of 4,400 jobs.
Job openings spike in manufacturing
The latest Job Opportunities and Labor Turnover Survey (JOLTS) report for August 2023 reported that there were 9.6 million job openings on the last business day of August. Job openings spiked in manufacturing (+72,000), while decreasing in construction (-3,000) and transportation, warehousing and utilities (-47,000).
Total separations, including quits, layoffs, discharges and other separations, also changed little across the economy. However, quits did increase in transportation, warehousing and utilities (+8,000). Quits decreased in construction (-15,000) and manufacturing (-30,000)
Meanwhile, layoffs and discharges stabilized in construction (-19,000) after a spike of 49,000 the previous month. Layoffs slightly increased in manufacturing (+8,000) and transportation, warehousing and utilities (+8,000).
Jobs Market Overview: August 2023
Overall Unemployment Rate
The unemployment rate spiked by .3 percentage points, reaching its highest point in 17 months.
August monthly gains marked the 31st consecutive month of job gains.
Labor Force Participation Rate
The labor force participation rate rose by .2 percentage points, but remains below its pre-pandemic level of 63.4%
Industry Employment Trends
Monthly Job Change
(+2.0% YoY Difference)
|Industry||Monthly Job Change||YoY Difference|
|Warehousing & Storage||-600||-2.6%|
|Architectural & Engineering||+4.4k||+4.1%|
|Consumer Services (Restaurants, Retail, Hospitality)||+52.8k||+2.0%|
Source: Bureau of Labor Statistics, Employment Situation Summary (bls.gov/news.release/empsit.nr0.htm)
Sector by Sector: August 2023
Manufacturing employment growth reported by the BLS in August included equal growth for durable goods (+12,000 jobs) and nondurable goods (+12,000) manufacturers.
Those subsectors also both saw increases in job openings, with nondurable goods employers adding 59,000 openings durable goods employers posting 12,000 more openings from July to August.
The PMI Manufacturing Index registered at 47.6% in August, the 10th month below 50 – however, an increase from 46.4% in July. Any reading below 50 signals contraction in the industry. PMI respondents signaled employment is in a “right-sizing mode with near-and moderate-term demand uncertainty.
While layoffs did spike in the construction industry in July, Associated Builders and Contractors Chief Economist Anirban Basu said in September that contractors are “upbeat.”
“There’s no sign of a construction recession in the near term,” Basu said in an ABC release on September 12. “If anything, contractors are more upbeat, as policy and technology shifts along with economic transformation, are creating substantial demand for improvements and growth in America’s built environment.”
Basu’s remarks came as ABC announced its Construction Backlog Indicator found that backlogs declined to 9.2 months in August from 9.3 months in July. The figure remains 0.5 months above the August 2022 level.
Warehousing & Storage
According to BLS, employment has remained at or above 1.9 million in the warehousing & storage sector since February 2022.
While job openings in the transportation, warehousing and utilities sector dipped in August, openings remain well above pre-pandemic levels. Job openings in the sector from 2013 to January 2021 never surpassed 350,000, and have bounced between 371,000 and 633,000 since that time.
The Logistics Manager Index reported a 51.2 rating in August, a marked increase over July’s rating which stood just above 45. It is the first time the index has stood above 50 since April. Any reading above 50 signals expansion in the industry.