5 Things the Labor Market Has Taught Us This Year

The financial industry’s success is intricately connected with the performance of the economy’s labor markets. 

In 2019, the labor market taught us many things, here are five.

#1 The Economy Can Boom During Trade Wars

Perhaps the most surprising result of the 2019 year is the economy and its labor market can continue to boom when trade wars are on the docket. 

When measuring the jobs market performance from peak to peak (meaning the number of months from the prior business cycle’s peak to the next peak), the current period, which peaked last in 2008, is now at 142 months.  At this time last year, there was a chorus of naysayers saying the U.S. economy was heading into a recession, largely due to the trade war.  Such views have continually failed to materialize.

#2 Wages Can Be Slow When the Economy is Booming

Wages, what we all enjoy as take-home pay, has been moderately good, but not great.  This has surprised many experts who find it odd to have an economy with such low unemployment continue to see no “boom” in wages.  According to these experts, wages should be growing above 4% on a year-over-year basis.  Wages are far from this at 3.65% and slowing.  This likely signals that the economy can keep growing for many more years.

#3 The Number of Unemployed Can Stay Low for a Long, Long Time

Another surprising finding of 2019 is that the number of individuals classified as unemployed can stay low for a long, long time.  In the prior expansion, the number of unemployed individuals bottomed at 6.7 million individuals.  In this expansion, the number of unemployed individuals has been below this 6.7 million since September 2017.  This is almost unbelievable to many observers.  May the economy live on forever!

#4 Professional Services, Education, and Healthcare Still Dominate

The fourth finding is that the economy still likes professional services, education, and healthcare.  And, they like to travel and relax.  The top three growing industries in 2019 so far have been Education & Health Services (up 2.6%), Leisure and Hospitality (up 2.1%), and Professional and Business Services (up 1.8%).

#5 The Older Generation Really Likes to Work

Perhaps one of the most reasonable explanations for why the economy continues to expand for such a long period is that the older generation continues to want to (or needs to) work.  The population aged 55 years and over continues to be largest age group in the labor force, and there’s no sign that the group plans on leaving the labor force anytime soon.