Source: Fortune
Summary
The ADP jobs report showed U.S. private employment increased by 90,000 in September, with the education, health care, and leisure sectors leading the growth. Manufacturing and construction added 17,000 and 15,000 jobs, respectively. Ed Brady of the Home Builders Institute warned about a shortage of skilled workers, noting six-figure salaries are available but unfilled. A New York Fed report found construction and other sectors saw wage growth despite a broader decline. Chicago Fed’s Austan Goolsbee expressed concern about construction labor driving inflation. ADP’s Nela Richardson said wage pressure was not yet a macroeconomic risk but noted structural labor shortages.
Our Reading
The numbers tell one story.
Private employment rose 90,000 in September, with education and health care leading the way.
Construction and manufacturing saw steady gains, but labor shortages persist.
Executives warn of a skills gap and worker preferences limiting hiring.
Wage growth in some sectors is outpacing the rest, but not yet a full-blown spiral.
Author: Evan Null
The hiring squeeze
The U.S. private sector added 90,000 jobs in September, according to ADP. Education and health care saw the largest gains, with 55,000 roles added. Leisure and hospitality added 22,000, while manufacturing and construction added 17,000 and 15,000, respectively. The numbers show a rebound after a three-month slowdown. The construction and manufacturing sectors remain strong, but labor shortages are a growing concern.
Skilled labor in short supply
Ed Brady of the Home Builders Institute warned that skilled blue-collar jobs with six-figure salaries are going unfilled. He said younger people need to be more aware of the opportunities in the sector. The industry is struggling to attract new workers, and the problem is expected to worsen before it improves. Parents, educators, and legislators are also being urged to recognize the value of these roles.
Wage growth in construction and manufacturing
A New York Fed report found that construction and other sectors have seen wage growth, even as most industries experience a decline. The pay premium in these sectors has caught the attention of policymakers. Chicago Fed president Austan Goolsbee said he is watching construction labor closely for signs of overheating. He warned that the sector is competing for resources and may be pushing other industries down.
Structural labor shortages
Nela Richardson, chief economist at ADP, said she wasn’t seeing enough wage overheating to be alarmed. She noted that the current situation is more structural than cyclical. The demand for skilled labor in manufacturing and construction is strong, but the supply is short. Richardson also highlighted the challenges of shift work, which can deter potential employees. The issue is not just about finding workers, but finding the right ones.
Worker preferences and hiring limits
Manufacturing jobs require shift work, which many workers are unwilling or unable to do. This limits the hiring spree in the sector, even with high wages. Richardson said the issue is not just about the availability of workers, but their willingness to take on certain roles. The labor market is shifting, but not in a way that’s causing a full-blown wage spiral. The challenge remains finding workers who are both qualified and available for the hours required.
