Economic Influences

October 2018

September unemployment fell to 3.7%, the lowest level in the 2000’s era. at under 4% in August. Yet, overall participation rate continues to hover around 63%.  Labor supply problems continue and 18% of prime aged workers (ages 25-54), nearly 23 million, are still not entering the work force.

Construction unemployment ticked up to 4.1% as the housing market is losing some strength.  Labor challenges continue to plague the construction industry and will persist through the near term as the mix of labor available does not meet with the mix of labor needed.

Our outlook is for durable sectors to slow their rates of growth as housing weakens, supply factors continue to drag on growth and pricing pressures hold back potential.

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Unemployment Rate


Overall unemployment dropped to 3.7% – lowest rate seen in the 2000’s.  Commodity prices increasing, labor supply issues continue unabated, tariffs doing what they do – raise prices.  Durable manufacturing, housing, consumer-related goods all are being impacted.  Our outlook shows unemployment will hold at this rate and start to inch back up in early 2019.

Construction Unemployment


Unemployment creeped up to 4.1% in September.  Pricing issues for new and existing homes, as well as upward pressures on inputs and labor start to increase their drag on growth.  2018 will finish well above 2017, but the double whammy of increasing rates and inflation will keep the trajectory lower in 2019.

High School Grad Unemployment


September unemployment rate at 3.5% is the lowest it has been since early 2000.  Jobs are plentiful, but matching the right skills to the openings continues to plague employers, with some lowering their requirements.

College Grads Unemployment


Market for college graduates continues to remain strong.  At 2%, unemployment is virtually non-existent for this segment.  Trend in this rate will continue to be low as more jobs pull college educated people into categories where college education hasn’t traditionally been needed.

Number not in Labor ForceCivilian Labor Force20-24 year old Civilian Labor Force25-54 Civilian Labor Force55+ Civilian Labor Force


Despite booming job sectors, civilian participation rate hovers around 63%.  Nearly 23 million prime age (25 – 54) workers are out of the labor force.

Treasury Bill YieldsFederal Funds RateInflation


All signs indicate FED will raise rates again before the year’s out.   Inflationary pressures are significant throughout sectors of the economy, but many of them are self-inflicted by regulatory/tariff dictates.

The very high probability the FED will raise rates again will lead to further deceleration in the housing market and other sectors.

Builder sentimentConsumer Sentiment


Despite rising prices and other issues related to housing, consumer and builder sentiment are at some of their highest points since 2000.  Builders continue to tell us this past year is the best they have ever had, even better than the mid-2000’s and in some areas, they are saying it’s at an unsustainable pace of growth.