US job market to slow down in 2020

The findings of the National Association for Business Economics' (Nabe) fourth quarter business conditions survey suggested fall in job openings by the most in more than four years in November.

According to the survey, the declines in employment were in the services, goods-producing and transportation, utilities, information, and communications industries. There were gains in employment in the finance, insurance, and real estate sectors.

"For the first time in a decade, there are as many respondents reporting decreases as increases in employment at their firms than in the previous three months," said Nabe business conditions survey chair Megan Greene.

Though job growth remains solid and more than enough to keep the unemployment rate low, momentum has slowed from the brisk pace experienced at the end of 2018 and the beginning of 2019.

The government last August estimated that the economy created 501,000 fewer jobs in the 12 months through March 2019 than previously reported, the biggest downward revision in the level of employment in a decade. That suggests job growth over that period averaged around 170,000 per month instead of 210,000. Economists expect job gains beyond March 2019 could also be revised lower.

The slowdown in employment gains has been blamed on worker shortages and trade tensions, especially the US-China trade war. The Nabe survey showed a significant increase in the percentage of companies reporting shortages of unskilled labour, while nearly half reported shortages of skilled workers.

The survey also offered some clues on why wages have not increased significantly despite worker shortages. Forty-seven per cent of respondents reported raising wages, while 44 percent said they were training internal staff for promotion. Businesses were also investing in labour-saving processes, with the share of respondents citing this measure rising to 36 per cent in January from 34 percent in October and 22 percent in January 2019.

Overall, businesses were more upbeat about the economy over the next 12 months than in October, with 30 percent of respondents expecting the economy to grow between 2.1 percent and three percent this year. That compared with a share of 20 percent in October.