Why Private Sector Job Growth Hit a Snag in September 2019: An Inside Look

The U.S. private sector added only a disappointing 135,000 jobs in September 2019, albeit extending the longest continuous jobs expansion on record, with growth at 2.9% year over year.

Private Sector Job Growth in Context

Many private companies boast minimal turnover, often offering significantly higher salaries and benefits compared to other sectors. This resilience in maintaining high standards of employment can be attributed to a variety of factors, including steady customer demand, effective management practices, and continuous investments in infrastructure and technology.

Critical Perspectives on the Jobs Report

Despite the extended growth, the addition of just 135,000 jobs is often seen as a sign of a potential economic slowdown. Critics suggesting that this is “disappointing” might be influenced by political agendas. The current administration's efforts to limit entitlements and reduce fiscal spending can exacerbate these perceptions, particularly among those who benefit from these programs.

For example, the Federal Reserve (FED) might play a political role in its policy decisions, but they are ultimately driven by economic data and inflation rates. Similarly, political parties often present their economic policies to attract voter support, regardless of the broader economic implications.

The Role of Government in Job Creation

Government agencies, such as public libraries and VA hospitals, often continue hiring due to ongoing commitments and budgetary constraints. However, the focus on hiring in these sectors does little to address the needs of the private sector.

For a more accurate assessment, we must look at how these new hires impact the private sector. While the headline number of 135,000 might seem low compared to the total number of employed individuals, the underlying factors driving this growth are more complex and nuanced.

The Larger Economic Picture

The long-term trend in the U.S. labor market is concerning. As regulations increase and political climates shift, the landscape for private businesses becomes less conducive to job creation. The economic boom of the 1950s and 1960s, following the post-World War II period, was a stark contrast to the political turmoil and economic uncertainty that has dominated since.

The current downward trend in job growth is a result of a combination of factors, including increased regulatory burdens, reduced tax incentives for businesses, and geopolitical uncertainties. These challenges have made it more difficult for private companies to sustain the same level of job creation as in previous decades.

Recent Developments and Future Outlook

As of early October 2019, the Bureau of Labor Statistics (BLS) reported that the unemployment rate had reached its lowest level since 1969. This statistic provides a positive outlook for economic conditions, but it does not necessarily reflect the challenges faced by the private sector in maintaining job growth.

For those who did secure jobs, the satisfaction with these roles is crucial. Employers often question the need to hire individuals if the work is not available, advocating for targeted job creation rather than simply increasing the number of employees without clear job prospects. This practice ensures that the hired individuals can contribute effectively to the organization, thereby enhancing overall productivity and economic health.

To address these challenges, policymakers must focus on creating an environment that encourages private sector growth. This includes reducing regulatory burdens, enhancing tax incentives for businesses, and fostering a stable and predictable political climate. By doing so, we can work towards a more resilient and prosperous private sector, which is the backbone of any thriving economy.

As we look forward to the future, it is essential to continue monitoring the labor market trends and addressing the underlying issues that affect job growth. By doing so, we can ensure that the goals of economic growth and job creation are met sustainably and equitably.