With February well underway and data collected from the previous month, let’s see how the job market is shaping out!
It not unusual for employment to decline in both the manufacturing and the service sector in January and then expand in February. In February 2017, employment will grow at 57.0 percent of manufacturing firms and decline at 8.1 percent. The resulting net increasing index of 48.9 (57.0 percent – 8.1 percent) suggests slightly faster employment growth in manufacturing than in February 2016 (47.5).
The service sector is, however, 10 times larger than the manufacturing sector and, even with a slower growth rate, will account for most of the jobs added to the U.S. economy in February 2017.
Compared with January of last year, in January 2017 the recruiting difficulty index declined by 4.5 points in the manufacturing sector, but increased by 5.3 points in the service sector. The increased recruiting difficulty that service sector firms faced in January 2017 may be one of the reasons they expect employment growth in February 2017 to be slower than a year ago.
In the manufacturing sector, 19.0 percent of firms reported raising new-hire compensation in January 2016; only 16.0 percent reported such increases in January 2017. However, in the service sector, no slowdown was observed; 19.2 percent of service-sector firms reported increasing new-hire compensation in January 2016 compared with 20.0 percent in January 2017.