The Labor Department released the August jobs report on Friday showing the U.S. economy added 151,000 jobs, below the forecast for 180,000. The unemployment rate, which was expected to tick lower to 4.8%, also remained flat at 4.9%. and the labor force participation rate was unchanged at 62.8%.
The less-cited but arguably more important employment-population ratio, at 59.7%, showed no improvement last month. As a result, the number of long-term unemployed–or, people who are jobless for 27 weeks or more–was unchanged at 2.0 million. These would-be American workers represented 26.1% of the total unemployed.
In August, the lack of wage growth was particularly concerning. Average hourly earnings for all employees on private non-farm payrolls increased by only 3 cents to $25.73. Over the year, average hourly earnings have risen by just 2.4%, which is still better than the previous month. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.64 in August.
The Federal Reserve policy-making committee, known as the Federal Open Markets Committee, will almost certainly postpone a proposed and expected interest rate hike. Citing the strength in the current jobs market, Fed Chair Janet Yellen had signaled it was time to move the benchmark interest rate higher.
“The most important part is the weakness in hours and wages. That slammed the door on September [as the time for rate increases],” Dan North, Euler Hermes North America’s chief economist, said. “The economy is still on fairly shaky ground. We were hoping manufacturing would have a blip up because there were signs it was recovering from a big slump, but this shows it’s not. There was positive growth in payrolls, but there’s just no wage pressure…the economy is in slow-growth mode.”
As has also been the case in the ADP National Employment Report, which gauges only the private-sector, wages and hours have reflected what has been a shift to part-time, service-based economy. The higher-paying employment sectors, such as manufacturing, lag behind the part-time, low-skill and pay opportunities.
The average workweek for all employees on private non-farm payrolls decreased by 0.1 hour to 34.3 hours in August. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.6 hours.
While employment in food services and drinking places continued to trend up over the month (+34,000), adding 312,000 jobs over the year, employment in mining continued to trend down in August (-4,000). Since reaching a peak in September 2014, employment in mining has fallen by 223,000, with losses concentrated in support activities for mining. Employment in several other industries–including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, temporary help services, and government–all either remained flat or declined.
The Manufacturing Report on Business, the Institute for Supply-Management gauge of U.S. factory activity, fell into contraction last month.
Metazip / September 4, 2016
@Ricky_Vaughn99 It’s the economy STUPID!
Berengaria / September 4, 2016
@Ricky_Vaughn99 I saw GA Jobs Report, all Positions were filled by Immigrants in one time period. Americans, not considered