The labor market over the past year was one for the record books with the unemployment rate at its lowest level in some five decades, and more than 2.27 million jobs added from December 2017 to date. An average of just over 206,000 jobs were added per month, as the economy showed continued strength.
“2018 was gangbusters,” says Mark Zandi, chief economist at Moody’s Analytics. “We had average monthly growth of over 200,000 juiced by tax cuts, government spending increases and fiscal stimulus.”
The biggest gains in terms of the number of jobs added this year were in professional and business services, education and health services, manufacturing, construction and leisure and hospitality.
So as concerns of a trade war begin to heighten and stock market volatility continues into the New Year, what will 2019 look like when it comes to jobs and hiring?
Experts say to expect more of the same in 2019 in terms of growth. “We overwhelmingly consume services,” says Megan Greene, managing director and chief economist at Manulife. “I would say the top sectors will be professional and business services and beyond that, education.” Healthcare will be another sector to watch for growth, economists say, as will leisure and hospitality if consumers continue to feel confident and spend more.
As the housing market cools in the face of rising interest rates, construction jobs will likely slow. “It’s a confluence of higher rates, a supply shortage and tax code changes with housing—I am not expecting a crash, but it probably won’t contribute to growth,” Greene says.
The factors that stand to impact job growth in the next year include the Federal Reserve’s action on interest rates, oil prices, and what year two of tariffs look like. Sectors like manufacturing will be particularly sensitive.
“The trade war is starting to do some economic damage,” says Zandi, which will continue if the Trump administration doesn’t find an end to tensions with China.
And if market turmoil and losses continue into the New Year, the job market stands to be impacted.
“If this down draft in stock prices at the end of 2018 is sustained it will hurt and ding the job market, because it will take some starch out of consumer spending, retailing and housing,” Zandi says. “But we should have another good year for job growth—not quite as good as 2018, but it should be a good year.”
Even with a potential for volatility and slower economic growth, the labor market is expected to remain tight, meaning employers will have to continue to up their game when it comes to recruiting and retaining.
“Employees are going to be looking for pay and benefits of course, but also flexibility and fluidity between work and home life, and most importantly—a great culture and a great leader for whom they can work,” says Jim Link, chief human resources officer at Randstad North America.
Another trend that will continue this year is hiring for potential in the face of a more limited labor pool.
“It’s looking for people that have that skill or capability, maybe not as much as [an employer] might want, but they have potential. Employers are upskilling and providing that opportunity to these folks to learn more and grow within their organizations. That builds engagement and that is something that will keep employees on board,” Link says.
And on the employee side, as this talent crunch continues, “Now is the time to ask for what you want of your employer,” Zandi says as the employee’s market continues into 2019.