<blockquote>The National Council on Compensation Insurance (NCCI) just released its Q4 economic briefing and the economy's impact on the Workers Compensation industry.<img class="alignright wp-image-324 size-medium" src="https://manleyandassociates.com/wp-content/uploads/2018/01/Screen-Shot-2018-01-17-at-3.46.34-PM-293x300.png" alt="2017 Employment Growth" width="293" height="300" />

The exhibits below are updated to reflect the current economic outlook for factors that typically impact workers compensation. Each exhibit also provides some context for the outlook, relative to the historical data. Forecasts are derived from Moody’s Analytics.</blockquote>
<blockquote>
<p style="text-align: left;"><strong>KEY TAKEAWAYS:</strong></p>
</blockquote>
<ul>
 	<li>Employment growth has slowed slightly from 1.9% in 2016 to 1.7% in 2017 and is projected to decline to 1.6% in 2018</li>
 	<li>Wage growth has increased from 1.2% to 2.0% in 2017 and is projected to increase to 4.1% in 2018</li>
 	<li>Continuously employed workers have seen consistently rising wage growth since 2010, currently at 3.2%</li>
 	<li>Medical inflation is expected to rise above 2% in 2018, higher than it has been since 2010</li>
 	<li>The yield curve flattened in 2017 as short-term interest rates rose but long-term rates held steady</li>
</ul>
<h2>Employment Growth</h2>
<p class="QEBarticle-text">Employment growth is estimated to be 244,000 in October and 228,000 in November after a final number of just 38,000 in September. However, the low September number largely reflects the temporary displacement of workers in hurricane-affected areas, especially in food services and drinking establishments. The three-month average growth of 170,000 jobs is right in line with the average employment growth of 176,000 in the first eight months of the year.</p>
<p class="QEBarticle-text">Real gross domestic product (GDP) growth in the third quarter was 3.2% at the seasonally adjusted annual rate, slightly higher than 3.1% in the second quarter. This is especially impressive, since many observers expected a slight decline due to hurricanes Harvey and Irma. There was a slight deceleration in third quarter personal consumption expenditure, per the Bureau of Economic Analysis, but this was outweighed by faster growth in private inventory investment and other factors.</p>
<p class="QEBarticle-text">Moody’s forecasts private employment growth to be 1.7% this year and 1.6% in 2018. The Bureau of Labor Statistics projects the civilian labor force aged 20–64 will rise from 144 million in 2016 to 150 million in 2026, an annualized growth rate of just 0.4%. This may make it difficult for employment growth to remain around 2% as it has been since 2011. If employment growth cannot come from demographics, it must come from bringing more potential workers into the workforce. The labor force participation rate has been stable since 2015. And the U-6 unemployment rate, which includes discouraged and underemployed workers, has recently declined to 8.0%. It has not been this low in over a decade.</p>
<p class="QEBarticle-text">The Drilling Down section of this issue examines employment growth and wage growth in detail by state and economic sector.</p>
Read More

Source: <em><a href="https://www.ncci.com/Articles/Pages/II_Insights_QEB_Economic-Outlook-Impact-WorkersComp-Q4-2017.aspx">The Economic Outlook and Its Impact on Workers Compensation - Q4 2017</a></em>