The Buffalo Niagara job market laid an egg in September.
While job growth has slowed to a crawl for most of this year, hiring turned negative in September, with the region losing 3,500 jobs from September 2016 to September 2017, according to new data released Thursday by the state Labor Department.
It was the worst job loss for any month over the past 7 1/2 years, dating back to March 2010, and just the fifth month during that time that the region has actually lost jobs. It also was the first time in at least 27 years that the region failed to add jobs from August to September — typically a period of robust hiring as students return to school and local colleges and universities build up their staffs.
Local economists noted that the local job market has been slowing throughout the year as unemployment has hovered around 5 percent and the pool of available workers has shrunk. The Buffalo Niagara job market also has not been hit by a wave of major layoffs or business closings that normally would signal a downturn in the local economy. And they warned against reading too much into a single month's job numbers.
"There's a lot of volatility from month to month," said John Slenker, the Labor Department's regional economist.
Even so, there is widespread data to support the notion that job growth across the Buffalo Niagara region is slowing. Labor Department data through the first nine months of this year indicates that hiring is running at half the pace it was during the same period last year, growing by 0.5 percent this year after increasing by 1 percent in the first three quarters of 2016.
Another set of job data from the U.S. Bureau of Labor Statistics that is less timely but based on more detailed employment reports filed by businesses, also showed that the pace of hiring slowed to just 0.7 percent during the first three months of this year, which was slightly less than half of the 1.3 percent increase in jobs during the same period in 2016. That data also showed that hiring here was less than half of the 1.5 percent nationwide pace.
A report issued earlier this week by a pair of Buffalo-based economists at the Federal Reserve Bank of New York also noted the slowdown in job growth, not only in Buffalo but across upstate, since early 2016.
"The slowdown has been driven by steep declines in the region’s manufacturing, retail and business services sectors," said economists Jaison R. Abel and Richard Deitz in the report. "In addition, job growth in Buffalo during the expansion had been buoyed by a surge in construction jobs associated with major projects such as the SolarCity factory and Buffalo Niagara Medical Campus. As these projects have wound down, so too has construction-related employment."
There also may be another element in play, the economists said. With unemployment still low and fewer than 30,000 local workers classified as unemployed, the job market may have tightened to the point where employers are struggling to hire new workers and instead are asking their existing employees to work longer hours.
"I think we're bumping up against a labor shortage," Slenker said.
The Labor Department report on Thursday showed that the weakness in the upstate job market was centered squarely in Western New York, where Rochester also shed jobs at a 0.6 percent annualized pace, the same as Buffalo Niagara. Only Elmira, which lost jobs at a 1.6 percent annualized pace, fared worse than the Buffalo and Rochester markets during September.
The September job numbers showed weakness in financial services and the leisure and hospitality sector — two of the segments that had been among the strongest parts of the local employment market during much of the recovery from the Great Recession. The September report said the region shed 2,600 jobs at local bars, restaurants and hotels over the past year, in spite of a wave of restaurant and hotel openings. The financial services sector, which spans the banking, insurance and real estate businesses, shed 1,800 jobs, centered mainly in the real estate segment at a time when local housing prices are approaching all-time highs.