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Economic Forecasts

February’s Big Gain Created March’s Hiring Slowdown

Kiplinger's latest forecast on jobs


GDP 3.0% pace in '18, up from 2.3% in '17 More »
Jobs Slower job gains likely this year as labor market tightens More »
Interest rates 10-year T-notes at 3.2% by end '18 More »
Inflation 2.6% in '18, up from 2.1% in '17 More »
Business spending Up 7% in '18, boosted by expanded tax breaks More »
Energy Crude trading from $60 to $65 per barrel in June More »
Housing Price growth: 5.0% by end of '18 More »
Retail sales Growing 4.2% in '18 (excluding gas and autos) More »
Trade deficit Widening 5%-6% in '18 More »

Fewer new jobs in March (103,000) was the natural result of February’s hiring surge (326,000). February’s warm weather pushed forward spring retail and construction hiring. If one averages the two months, the result is a solid increase of 215,000 positions per month.

A shrinking labor force will slow job growth this year. Since peaking at 250,000 per month in 2014, the economy has added fewer jobs each year as the pool of workers has steadily shrunk because of flat population growth. Boosts in labor force participation are possible, and would help, but are unlikely to be enough to offset the natural slowdown.

Wages were up slightly in March. Wage growth increased to 2.7% from 2.6% in February. Expect salaries to advance nearly 3% by year’s end. However, the fatter paychecks will not be evenly distributed among all workers. Nonsupervisory workers received only a 2.4% boost in March. Their raises have lagged management’s for the past two years.

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Unemployment held at 4.1% in March, but look for it to drop to 3.8% by the end of 2018 as it becomes harder for employers to find suitable candidates. The short-term unemployment rate (those unemployed for less than six months) is at its lowest level in 65 years.


Further proof of a tightening labor market is evidenced by lots of job openings in certain sectors: construction, food services, health care, transportation and warehousing. Openings in health care and food services are at their highest levels in 15 years.

See Also: The Best Jobs for the Future

Source: Department of Labor, Employment Data