“Economists expected hiring to slow in 2018 because a tight labor market—consistent with a sub-4% unemployment rate—would make it difficult for businesses to find workers. The opposite has occurred, largely due to a resurgence in two categories that had been contracting, retail and manufacturing.”

Stores, Factories Lead This Year’s Unexpected Hiring Boom
By Eric Morath
The Wall Street Journal
August 5, 2018

Economists expected hiring to slow in 2018 because a tight labor market—consistent with a sub-4% unemployment rate—would make it difficult for businesses to find workers. The opposite has occurred, largely due to a resurgence in two categories that had been contracting, retail and manufacturing.

Through July, U.S. employers added an average of 215,000 jobs a month to payrolls. That is a marked acceleration from the 184,000 jobs added on average during the first seven months last year. And, well above the 165,000 average monthly employment growth economists surveyed by The Wall Street Journal predicted for 2018 when asked in January.

One big reason is after shedding an average of 6,000 jobs a month during the first seven months of 2017, retailers added an average of 12,000 each month this year.

An increase in consumer spending, driven by rising incomes and strong confidence, is causing some retailers to expand.

Manufacturers have mostly been shedding jobs since the late 1970s, but employment in the sector has increased since the recession ended in 2009, and growth accelerated over the past year. The pace of factory hiring more than doubled this year compared with the first seven months of 2017.

The manufacturing sector is benefiting from a growing global economy that demands American-made goods and increased domestic oil production, which supports demand for metals and heavy equipment. The tax law, enacted late last year, was written to incentivize businesses to invest in capital equipment, and there are some early signs that is happening.

Read the full article here.