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.
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.
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.
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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