Even putting aside the hurricane-related fall in payroll employment in September specifically, trend employment growth has been gradually slowing for more than two years now. The surge in job openings to a record high, however, suggests that slowdown has more to do with the dwindling supply of suitable candidates rather than signalling that demand is weakening.
Trend employment growth will continue to slow over the next 12 months but, as long as the monthly gains average more than 100,000, that will be enough to absorb those coming into the labour force and to keep the unemployment rate, which is already at a 16-year low, on a downward trend. The flip side is that to expand production, firms will increasingly have to rely on capital investment. This has already started to happen in the first half of this year, with a resulting boost to productivity too.
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