As 2017 draws to a close, now is a good time to take stock of this year’s labor market. With few exceptions—notably wage growth—economic indicators tell us this was a great year for the US labor market. The overall labor market saw records broken and returns to numbers that have scarcely been seen this century. While some industries are struggling, others are doing surprisingly well. There are a few milestones and trends I want to take a closer look at from this year, as we say goodbye to 2017 and look forward to 2018.
3 Milestones Celebrated in 2017
- Our unemployment rate hit 4.1% this October—where it remained for November. The last time the unemployment rate fell below 4.2% was December 2000, 17 years ago.
- The number of job openings surpassed 6 million in June 2017 for the first time since the Bureau of Labor Statistics (BLS) began measuring job openings—coincidentally in December of 2000.
- In September of 2017, the census bureau reported that median household income reached a record high in 2016. Adjusted for inflation, the 50th percentile household made $59,039 last year.
3 Labor Market Trends of 2017
- Retail did decline, but it wasn’t an apocalypse and e-commerce compensated. Despite great losses resulting from the economic crisis of 2008, retail had a strong recovery from the recession. Between 2010 and 2016, employment in the retail sector rose dramatically, reaching higher levels than were seen even pre-recession. 2017 has not been a great year for jobs in this industry, and sharp drops in employment early in the year generated talk of a retail-pocalypse. However, that decline seems to have leveled off in the latter half of the year. There were only about 23,000 fewer retail jobs in November 2017—the most recent month for which we have data—than there were one year prior. In contrast, warehousing and storage and truck transportation—two industries closely tied to e-commerce—have experienced combined job growth of over 48,000 over that period of time.
- Healthcare continued its forward march in job growth. Partially due to our aging population, healthcare was one sector that actually experienced job growth throughout the recession—and that trend has continued during 2017. Healthcare is one of the few industries that saw jobs added in each month of the year so far.
- Manufacturing added 170,000 jobs in the past year. Many people think that manufacturing jobs are in decline, but that is currently not the case. Manufacturing employment did decline starting in the late 1990s and experienced a precipitous drop as a result of the great recession. However, like many other industries, manufacturing saw steady growth during the recovery. Overall employment in this industry has not recovered to where it was in 2007, let alone in 1998, which contributes to perceptions of manufacturing as an industry in decline. But from early 2010 through 2015, manufacturing jobs grew regularly before leveling out in 2016. And in 2017, job growth in manufacturing picked up again.
We will get a final snapshot of the 2017 labor market when 2018 rolls in. The December jobs report will go live on January 5th, and I expect it will be consistent with the picture that has been painted all year: the US labor market, though not roaring, is thriving. Now that unemployment is at a 17-year low, we will look for other indicators—such as turnover and wage growth rates—to pick up in 2018.
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