U.S. Added 22,000 Jobs in August
Will the Federal Reserve cut interest rates? The economy only added 88,000 this summer!
Yikes. It’s not good when the economy added only 22,000 jobs in August.
The news gets worse because of June and July revisions: “The change in total nonfarm payroll employment for June was revised down by 27,000, from +14,000 to -13,000, and the change for July was revised up by 6,000, from +73,000 to +79,000. With these revisions, employment in June and July combined is 21,000 lower than previously reported.”
That’s only 88,000 jobs added in the summer.
Overall, the job reports have been stagnant since April, showing little change.
Look, I’m going to report good and bad news during President Donald Trump’s term.
I look forward to how the administration will spin this news.
Somewhat Good News
They’ll probably mention that the unemployment rate changed little in August, set at 4.3%, up from 4.2% in July. But there’s a catch due to the U-6 stats. I’ll talk about that in the next section.
Other stats that changed only a little:
Among the unemployed, the number of new entrants decreased by 199,000 in August to 786,000, largely offsetting an increase in the prior month. New entrants are unemployed people who are looking for their first job. (See table A-11.)
The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.9 million in August but has increased by 385,000 over the year. In August, the long-term unemployed accounted for 25.7 percent of all unemployed people. (See table A-12.)
In August, the labor force participation rate changed little at 62.3 percent, and the employment population ratio was unchanged at 59.6 percent. Both measures have declined by 0.4 percentage point over the year. (See table A-1.)
The number of people employed part time for economic reasons, at 4.7 million, changed little in August. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. (See table A-8.)
The number of people not in the labor force who currently want a job, at 6.4 million, changed little in August but was up by 722,000 over the year. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. (See table A-1.)
Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force changed little at 1.8 million in August. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, also changed little over the month at 514,000. (See Summary table A.)
Wages continue to climb:
Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $36.53 in August. Over the past 12 months, average hourly earnings have increased by 3.7 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 12 cents, or 0.4 percent, to $31.46. (See tables B-3 and B-8.)
Federal government jobs declined by 15,000! I’m always happy to hear that!
The health care sector added 31,000 jobs. It’s below the average gain of 42,000, but the employment trend continues to go up.
Social assistance also experienced growth, with 16,000 new jobs added in August.
Job Stats
But major private sector jobs either saw no change or a decline in jobs:
In August, employment in mining, quarrying, and oil and gas extraction declined by 6,000, after changing little over the prior 12 months.
Wholesale trade employment continued to trend down in August (-12,000) and has fallen by 32,000 since May.
Manufacturing employment changed little in August (-12,000) but is down by 78,000 over the year. Employment in transportation equipment manufacturing declined by 15,000 over the month, in part due to strike activity.
Employment showed little change over the month in other major industries, including construction, retail trade, transportation and warehousing, information, financial activities, professional and business services, leisure and hospitality, and other services.
It’s striking to me that wages continue to rise while average hourly working hours remain relatively steady.
Could it be that people are taking on two or more jobs within a company? You know, like Secretary of State Marco Rubio working four jobs!
I doubt it has anything to do with the administration deporting illegal aliens.
The unemployment rate you see in the news is the U-3 unemployment rate, which only counts the jobless civilian force that is looking for work.
The U-6 unemployment rate is more inclusive: “Total unemployed, plus all people marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all people marginally attached to the labor force.”
That statistic increased from 7.9% in July to 8.1% in August.
The Fed
Well, Federal Reserve Chair Jerome Powell might consider cutting interest rates by a quarter percentage point due to the dismal report.
It doesn’t help that consumer confidence fell by 6% in August.
Powell has continuously said a weak labor market would force the Fed to cut rates:
“The balance of risks appears to be shifting,” Powell said last month. Powell said then that, while labor markets appear to be stable, it is “a curious kind of balance,” where both the supply of and demand for workers is slowing. Immigration restrictions are crimping the availability of workers, and companies are bolstering their results by holding down hiring and getting employees to work more efficiently.
Cutting interest rates would help encourage investment, making borrowing more affordable. However, it could hurt lenders and savers.
It’s astonishing that the Federal Reserve has such power, especially since it seems there are no clear winners whenever the Fed makes a decision. Let’s end the fed!
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Comments
Good luck finding qualified college grads to fill any position. It takes my company months to even find anyone we would be willing to interview. It’s a global company that does medical hardware, software and IT support so it’s not really a niche market. Our European facilities have some brilliant people working for them. Even when we finally find someone to hire in the US the work ethic and gaming of the system kills the productivity of others.
When I think of jobs added, the first thing I think of the presidency. The presidential office was vacant for 4 years. But now that job has been filled.
Only added xx.
The positive is that jobs, real jobs unlike the pretend jobs added during the last administration, were actually added.
Also an unemployment rate of 4% is practically full employment.
Look at it this way, with wages climbing in America it could be a lot worse, you could be a person trying to get a job in the EU who is in real danger of entering a depression!
The numbers are interesting. Job losses in government are a straight net plus since government tax dollars are no longer needed to pay for those positions. Manufacturing prefers a calm environment like a millpond to grow, and with tariffs there are pretty big waves, BUT we are still seeing growth as companies pull foreign manufacturing back to the US for local markets. Add in that the BuLaborStat has been dinking with the numbers wholesale for the last four years and there’s no concrete answer to “which direction is the US economy headed?”
Long-term, it looks like we’re headed to more economic activity in the US with less government, which is a godsend since the normal response to economic issues for the last few decades is “we need to add another agency…”
Wut? We are not seeing growth in the manufacturing sector. We lost 12K manufacturing jobs last month and we’re down almost 80K jobs from the first of the year.
The break even monthly number is down to 30k, so 88k for the 3 months of summer isn’t bad.
The reason why the break even number has declined so dramatically is because the monthly influx of illegal aliens is now near zero.
Also August is a traditionally quiet time of the year for hiring. Usually picks up once out of summer and people are back in the office.
A lot of companies are quietly taking out the DEI trash and not backfilling or backfilling very slowly, especially in tech and IT.
IT/tech is pretty rough right now.
A lot of layoffs. Intel, MSFT, Oracle, not to mention other areas where tech and IT departments are getting shredded. I think REI had some coming to.
So far as wages going up. Nothing is keeping up with inflation. I did the household budget look back this this week for July/Aug and am still WTF on the grocery category. Granted a lot of stuff from Walmart went to the back to school category, but we are still 125% higher for our grocery budget than in 2019.
AND in 2019 we would get the tubes of tenderloin regularly… that’s been sliced to a few times a year.
Keeping wages from keeping up with inflation is how you kill inflation. The Fed can’t let wages rise to meet inflation or they sustain more inflation. Prices ration supply. Let prices rise and wages rise to meet them, and you’re in the same state again but at higher prices.
Or we could rely on competition among employers to hire and retain the most productive workers and the resulting productivity gain to do their magic. Combined with sharp reductions in ‘welfare’ benefits (IMO elimination should be the goal) for able bodied which not only immediately reduces govt outlays to support the able bodied but pushes them into the workforce creating a surge in available low skill workers.
Not many welfare recipients competing for these jobs.
Trump should have put a 900% tariff on outsourced labor to India AND they need to clamp down on the tech visas. Employers are cheating that system big time. AoSHQ ran a delightful article on how employers are shadow posting jobs where no one can find them, and then declaring a worker shortage when no one applies. Wells Fargo appeared to be a big offender when I checked the site.
Well yeah, welfare recipients by and large ain’t currently IN the labor force. Ending the welfare income, free housing, free health IN, ‘free lunch’ lifestyle for able bodied adults pushes them INTO the labor force.
You could also lose weight by cutting off your legs. There are better ways.
Having the price on non-discretionary items increase to the point where the economy gets choked out is the stupidest path out.
Clawing back the grift money is the smarter way.
Inflation is the threat. Everything falls apart if you don’t keep that at bay. Which means withdrawing dollars from the economy relative to normal operation, which means high interest rates, which are how it’s done.
On this we agree. The Fed should be pushing rates towards 8% – 9%. Do that and suddenly the boondoggles and mal investment can’t attract capital. The zombie companies go away. Savers suddenly have a very competitive lower risk alternative (bonds/CDs) to higher risk assets (equities/spec real estate) which means the current imbalance between saving v investment returns to more normal levels.
The other major advantage of pushing rates so high is the impact on fiscal policy (govt spending). At current levels we are spending about $1.2 Trillion for interest on Federal debt. This would essentially double that. This becomes the catalyst to force spending cuts and reassessment of spending priorities by Congress. Rates will eventually go much higher due to sheer size of Federal debt, lack of fiscal discipline across both political parties and lack of willing buyers (we already see Foreign Central Banks reducing their purchases of US Treasury bonds in favor of gold/hard assets and other currencies. This will accelerate until we hit the wall and they refuse to buy anymore US Treasury instruments. IMO it would be better to pull the trigger on the coming rise in interest rates ourselves. The alternative is allowing others to control the trigger point or worse more Fed Reserve printing of more dollars which simply reduces the value of the existing dollars making them worthless.
As I have mentioned the payroll job numbers are not worth a warm bucket of spit because of their frequent revisions. A much better number is household employment. The good news is that employment increased by 288 thousand from July to August after declining 260 from June to July. The bad news is the household employment is down over 500 thousand since April. Why the Fed does not seem to be paying attention to the household employment numbers is beyond my pay grade.
fwiw – I am not overly confident in the quality of the job numbers. As I have stated on other threads, getting good numbers requires good sampling and statistical methodology.
The job numbers are compiled from employment surveys. Those employment surveys require high response rates to remain valid statistically. (remember random sampling from your college statistics course?). Due to the low response rates, the labor department has increased the sample size which results in even lower participation/response rates. That procedure creates less statistical quality, not more statistical validity. f
Good news.
Actually the number of new available jobs may be even higher, according to the Center for Immigration Studies between Jan and May of 2025 they estimate a 600,000 drop in non-citizen residents (most of that being self deportation OC).
https://cis.org/Report/Illegal-Population-Down-January
the welfare state makes it easy for people to not need to work
and that welfare state has increased who knows how much with program after program,, no matter what tricky names they call it…is designed to shift the money from whts to the rest ( see the keith ellison son story for further proof of this)
You can have cradle-to-grave social safety nets and benefits,
you can have unlimited immigration,
But unless you have unlimited money as well,
You can’t have both.