The article referenced in this blog post is available to read here on the Brookings website.
What We Are Reading: Article from Brookings Institute looks forward to the 2017 labor market
Although we’re now two months into the new year, it is always important to look back on the job gains and the changes in the economy during 2016, while also starting to chart what kind of expectations we should set for the coming months and years. In an article published by the Brookings Institute, we get an expert’s view of the industries and larger trends that have changed over the last twelve months.
In the article, Gary Burtless, a Senior Fellow at the Brookings Institute, summarizes the job gains seen over 2016. One of the most interesting observations he makes is that “between 90,000 and 100,000 new jobs are needed every month to keep the unemployment rate from rising. Since the second half of 2010, monthly payroll gains have comfortable exceeded this threshold. As a result, the jobless rate has declined significantly.”
Labor force participation will be an important market going forward
That being said, being able to keep the economy growing at a similar pace will be difficult in 2017. As Burtless points out, the declining labor force participation rate, particularly among working-age men, makes it hard to predict payroll job increases of 175,000 per month, the rate seen over the past five years. Without a rise in the participation rate, Burtless says, it is “hard to predict how long employment gains can continue at the current pace without sparking a surge in wage inflation.”
While there have perhaps been some signs of labor force participation rebound in Michigan, and perhaps even in the West Michigan region, it will still be difficult to find individuals to fill talent needs. We should expect tempered job gains, nationally and locally, in 2017.
Want to learn more?
Knowing the state of the local and national economy is key to understanding the current talent challenges facing many employers in West Michigan. Articles like this one from Brookings can help summarize the path forward. Read more about the local labor market in the 2016 Talent Demand Report.
