U.S. Labor Market Tightening
Employers with operations in the U.S. should not underestimate current difficulties in hiring workers. Gad Levanon, chief economist for North America at The Conference Board, in August 2018 commented on the U.S. Bureau of Labor Statistics Employment Situation Report.
“The [U.S.] labor market is tightening with the unemployment rate declining by 0.1 percentage points and the broader U-6 measure dropping by 0.3 percentage points.”
The U.S. unemployment rate fell to 3.9 percent in July 2018 from 4.0 percent in June after it touched an 18-year low of 3.8% in May.
U-6 refers to a broad measure of labor market slack, which includes those working part-time for economic reasons, discouraged workers, and workers marginally attached to the labor force. For July 2018, the U-6 unemployment rate was 7.9%, down from 8.1% in June but still above the low of 7.3% in May. For perspective, U-6 unemployment stood at 10.1% in January 2017 with a long-term peak at 17.9% in February 2010.
Added Levanon: “Much of the strength is coming from strong job growth in blue-collar industries like manufacturing and construction. In the past 12 months, the unemployment rate for construction workers declined by 2.1 percentage points, and for transportation and production workers by 1.7 and 1.0 percentage points respectively, versus a very small decline in white-collar occupations. […] The data tells us a story of two labor markets: significant labor shortages for blue-collar workers versus moderate tightness in white-collar jobs.”
At The Conference Board, Gad Levanon oversees the labor market, U.S. forecasting, and Help Wanted OnLine programs. His research focuses on trends in U.S. and global labor markets, the U.S. economy, and forecasting using economic indicators.