Watch for Downward Revisions

By Diane Swonk, Grant Thornton

Payroll employment is expected to rise by 170,000 in January, which will mark a slight pickup from the initially reported 145,000 jobs created in December. The government sector is expected to account for 5,000 of those jobs, which will leave private payrolls rising by 165,000 jobs. We are still waiting for the surge in census hires, which should show up in the spring.

The big news will come in revisions affecting April 2018 to March 2019, from which we could see about 500,000 jobs disappear, along with other revisions through 2019. Many of the losses appear to have fallen during the latter part of 2018 and the early part of 2019 but revisions are expected to suppress the annual totals for both 2018 and 2019.

Job gains are expected to be driven by hires in health care and leisure and hospitality. The health care hires largely reflect the demographics of aging and the need for more health care personnel. Food services have also remained a sector with strong growth. Professional hires should rebound after a December lull. The pace of hiring for professional services slowed fairly significantly over the past year. This category includes consultants and likely reflects the weakness we have seen in business investment.

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