The Buffalo Niagara job market is off to a hot start in 2018.
The region’s job growth accelerated to 1.4 percent in January – the fastest increase in any 12-month period in nearly two years, dating back to April 2016.
The January jump continued a streak of more robust job growth that began in November and now has continued for three months, according to revised data released Thursday by the state Labor Department.
The monthly job data, however, is notoriously volatile, and John Slenker, the Labor Department’s regional economist in Buffalo, cautioned that the January data likely is overstating the strength of the midwinter hiring wave.
The main reason: With unemployment hovering around 5 percent and the region’s population stagnating, it is becoming increasingly difficult for local businesses to find qualified workers, which puts a damper on hiring.
“The labor force issue is the reason I think this may be overstated,” Slenker said.
Beyond that, January job statistics can fluctuate because of the timing of seasonal factors, from the reopening of school following the holiday break and the reduction in temporary holiday staffing at local stores, said Gary Keith, the regional economist at M&T Bank. Weather conditions also can influence hiring at seasonal venues, such as local ski areas.
Even so, the January jobs report is an encouraging sign for the Buffalo Niagara economy as some of the region’s major stimulus projects, from the construction of the new University at Buffalo medical school and the Oishei Children’s Hospital to the Tesla solar panel factory, winds down.
Driving up hiring during January was a nearly 4 percent increase in staffing at local bars, hotels and restaurants. Hiring in the financial services sector, especially at local banks and insurers, grew by a little more than 2 percent. Employment in professional and business services grew by more than 3 percent, fueled by a more than 6 percent jump in jobs within a category that includes temporary help agencies.
On the downside, retail jobs slumped by nearly 4 percent as local stores were hurt by online shopping and a weak Canadian dollar that makes it less enticing for shoppers to cross the border in search of lower prices at Buffalo Niagara malls. Factory employment dipped slightly, while hiring by government agencies, which includes public schools, also weakened.
Hiring by private sector firms, which excludes government jobs, grew by 1.7 percent during January – the biggest single month increase in more than 6½ years.
The local job growth, in January at least, was stronger than the statewide increase of 1 percent and it was only slightly slower than the 1.5 percent uptick nationwide.
Among the 15 major metro areas in New York, only Albany and New York City had more robust job growth during January than the Buffalo Niagara region, the Labor Department said.
The revised job data is based on more detailed unemployment insurance information that companies file with the state. The revisions are done each year in early March.