Employment Data in Perspective: Beyond the Headlines

The Bureau of Labor Statistics released its employment data. Reports from news media are using phrases like “abysmal,” “yet another warning sign,” and “slows sharply.” Let’s put these headlines in perspective, as always, with the data.

We like to use US Private Sector Employment data that is not seasonally adjusted. The news cycle and the oft-touted “jobs created” figure comes from the US Nonfarm Payroll Employment series, which is seasonally adjusted and includes public employment as well. We prefer to look at pure data, rather than a synthetic adjustment for seasonality. In addition, we favor a focus on the business world as opposed to the public sector. Both of these employment series show that the employment headcount has risen 0.9% over the last 12 months — a weaker-than-normal ascent — and that the labor market is in a slowing growth trend.

Taking a closer look:

• Employment is uncharacteristically weak: Both series show month-to-month Employment changes that are the weakest since the Great Recession.
• Only slightly weaker than 2024: Both series show month-to-month Employment changes that are only slightly weaker than 2024, with 2025 shaping up to resemble 2024 more than 2008 in this regard.
• A lagging indicator: The weakness in Employment ties in with prior weakness in the ITR Leading Indicator™, the US ISM PMI (Purchasing Managers Index), and in the economy overall because Employment is a lagging indicator
• Still more slowing growth yet to come before 2026 upturn: Expect more consternation ahead into late this year or early next year given what has already transpired in the leading indicators and the economy. At the same time, plan for Employment growth to accelerate mildly again over the balance of 2026.
• Wages are rising: US Average Weekly Earnings of Private Sector Workers rose to $1,245, a 3.7% increase over the last 12 months, an increase greater than inflation. The July-to-August increase was slightly stronger than the median increase for that time.

In aggregate, what we are seeing is mild growth. That mild growth extends to incomes and to our forecast for the US economy overall. The latest data paints a picture of a labor market that is weakened, with both demand and supply under pressure. Yet the income data illustrates that wage increases are still flowing through the economy to consumers, fueling increasing consumption and economic growth, albeit at a mild pace.

Ensure your business planning isn’t susceptible to input from sensationalist news headlines. Focus on the data.