Economy Adds 201K jobs in August; Unemployment Rate Holds at 3.9%

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Number of payroll jobs INCREASED 201,000 in August;
  • Unemployment rate in August REMAINED AT 3.9 percent;
  • Average weekly earnings INCREASED $3.15 in August to $937.02, a 3.1 percent year-year gain, strongest since March;
  • Average hourly earnings GREW 10¢, in August a 2.8 percent annual increase, strongest since last September
  • Private sector jobs INCREASED 204,000;
  • Number of multiple jobholders FELL 128,000, suggesting all the new jobs went to individuals who were not already working
  • Prior month job totals REVISED DOWN 50K: DOWN 10,000 in July to a growth of 147,000 jobs (from 157,000) DOWN in June to a gain of 208,000 (from the last report of a 248,000 increase);
  • The number of persons unemployed FELL 46,000 as the number of person employed DECLINED 423,000;
  • Average weekly hours REMAINED AT5 in August;
  • Labor force – FELL 469,000 in June as the labor force participation rate DROPPED to 62.7 percent (lowest since January) from 62.9 percent;
  • The number of persons NOT in the labor force INCREASED 692,000, the largest month-month increase since last October;
  • Employment-Population ratio FELL to 60.3 percent –lowest since January –from 60.5 percent in July,
  • By sector number of professional-and-business-service jobs and health-and education jobs ROSE 53,000 each;
  • The number of temp jobs INCREASED 10,000 in August (as it had in July);
  • The number of leisure and hospitality jobs grew 13,000 in August, net of a 17,500 INCREASE in food service jobs;
  • Manufacturing jobs FELL 3,000.

Trends:

  • Unemployment rate among Blacks FELL to 6.3 percent, lowest on record;
  • Three-month average of job growth fell to 185,000 lowest since January (167,000)

Data Source Bureau of Labor Statistics

Image result for employment situation report

Then August Employment Situation report from the Bureau of Labor Statistics had something for everyone. For optimists, it marked the 95th straight month the number of payroll jobs. For pessimists, it showed a surprising decline in both the labor force participation rate and the employment-population ratio as well as an increase in the number of persons not in the labor force; the largest such increase since last October.

(An optimist, of course, sees a glass half full, a pessimist sees a glass half empty and an engineer is interested in the size of the glass.)

There are some troubling signs in this report, buried in the data.

Despite a sharp jump in average weekly earnings translating to a 3.1 percent year-year growth, retailers cut back on staffing, suggesting they don’t see a boost in activity.

Of course, the increase in average weekly earnings could also be due to declines or weak increases in jobs in the two lowest paying sector: retail and leisure and hospitality, which together produced 11,100 new payroll jobs, about 8.5 percent of the total new jobs.

We should be encouraged that higher paying sectors are adding more jobs. In July 2017, the retail and leisure-and-hospitality sectors accounted for one-third of the increase in payroll jobs. The decline could be due to students returning to school, turning in their burger-flipping spatulas for laptops and textbooks.

But while the weak gain in low-paying jobs was occurring, the labor force itself shrank (thanks again to return to school) and the labor force participation rate fell. The drop in the labor force itself demands a closer look. The labor force includes all persons who have a job and all persons who want and are available for one. The latter definition might exclude a huge chunk of the students to classrooms.

The encouraging numbers in the report came in the construction sector which continues to grow tortoise-like, adding 23,000 jobs in August, the fifth consecutive monthly increase. About 13,000 of those new jobs came in the residential construction sector even though new home sales continue to decline. And, we’ve yet to feel the effects of the trade war started by the Trump Administration which will impact the cost of home construction.

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

0 Responses to “Economy Adds 201K jobs in August; Unemployment Rate Holds at 3.9%”


  • No Comments

Leave a Reply