Report: Delaware job growth slowing

349px-Seal_of_DelawareDOVER — Job growth in Delaware appears to be slowing, according to the October Labor Review released by the Delaware Department of Labor on Friday.

Annual job growth had been steady at +10,000 for most of 2015, slipping to +8,500 at the end of 2015 and first quarter of 2016. That growth was cut in half in the second quarter.
According to Office of Occupational and Labor Market Information chief, Dr. George Sharpley, that’s probably not as bad as it sounds.

“It’s hard to say that a slowdown in job growth is encouraging, but it’s not really worrying either unless it continues on this same path and goes down below a normal growth rate,” he said.

“At this point it’s most likely that the cause of the slowdown is because the economy has gotten closer to full employment and that it’s settling into a long-term steady growth pattern.”

Dr. Sharpley said the slowdown wasn’t unexpected.

“After a recession you’ll have a period of faster-than-usual job growth as people are able to find jobs again, like we did,” he said.

“But that can’t last forever. There is nothing that I see that would indicate to me that growth will keep slowing down to zero or to negative. I suspect that it will level off and steady unless something unforeseen happens.”

The labor review also reported that the employment estimate from the Local Area Unemployment Statistics (LAUS) program showed annual gains of more than 20,000 employed state residents
as recently as April, but has dropped steadily since then to below +9,000 in October.

A third measure, the Current Employment Statistics (CES) survey of employers that had been holding steady at over +10,000, has now also dropped below +9,000. That survey showed an annual gain of 15,000 jobs in June, when the more reliable QCEW showed +3,400.

The review also noted that although job growth has slowed there was no “trigger” apparent that would cause a recession. The likely scenario is that the state settles into growth on the order of about +5,000 jobs per year, consistent with full employment.

Mr. Sharpley is optimistic about what nearing “full employment” may mean for wages though.

“As we get closer to full employment, it’s absolutely possible to see wages increase,” he said. “I think we are already starting to see that to some extent, at least nationally.”

As a new president takes office in January and the Federal Reserve murmurs about the possibility of an interest rate hike, the political climate might affect the future jobs outlooks as well, he said.

“There is a definite possibility for impact there,” he said. “The new administration is talking about possible tax cuts and a big program for public infrastructure, these would likely give a temporary boost to the economy.

“However, with the economy close to full employment, it can’t really increase output by all that much and these measures would more likely just increase prices. We may get a temporary boost in output, but then the Federal Reserve would be forced to raise interest rates to head off inflation.”

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