Today’s jobs report marks 71 consecutive months of job growth for the USA economy.
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The Bureau of Labor Statistics reported this morning that the US economy added 151,000 jobs in August, roughly in line with projections. That was almost 30,000 fewer jobs than economists had been expecting, and almost 125,000 fewer positions than were added by employers in each of the prior two months. Growth was weak in April and May, then picked up in June and July.
“Given the August payroll report’s tendency to underwhelm, the size of the miss likely had many breathing a sigh of relief”, he said. A broader barometer, which counts not only the officially unemployed but also part-time workers who want full-time work and people who have given up their job hunts, is 9.7 percent.
The unemployment rate held steady at 4.9 percent from July to August, and the average hourly wage bumped up by 3 cents to $25.73 (a year-over-year gain of 2.4 percent). Average hourly earnings for August rose by 0.1%, slightly below the 0.2%, expectation, but year-on-year earnings were pushed down from growth of 2.7% to 2.4%.
Stocks are moving higher in midday trading as investors hope that a slowdown in hiring last month will prompt the Federal Reserve to keep interest rates low for longer. Even though the report lacked spark, the monthly average for payroll growth is still a solid 232,000 for the three months through August, keeping alive the possibility the Federal Reserve might edge interest rates up a small amount as soon as later in the month. “After all inflation pressures are very benign and the US election has the potential to weigh on sentiment and activity a touch”.
141-a-12-(Gus Faucher (foh-SHAY’), deputy chief economist, PNC Financial, in AP interview)-“end of 2016″-Economist Gus Faucher says jobs report was decent, but he doesn’t think it’s good enough for the Fed to hike interest rates later this month”.
Hawkish statements from Fed Chair Janet Yellen and Vice Chair Stanley Fischer last week had increased expectations that the U.S. central bank is closer to raising rates, though most investors see one increase in December as most likely if the Fed hikes this year. Paychecks grew 2.4% last month compared to a year ago. But many economists expected moderating growth, believing the economy is nearing full employment.
Also muddying the picture: The Labor Department has underestimated August employment gains the past five years by an average 62,000, based on subsequent revisions, according to an analysis by High Frequency Economics. Stagnant wage growth has always been a drag on consumption and economic growth.
Some economists are now wondering if a rate hike will happen at all this year. But he said Congress can do more to spur stronger job growth, such as boosting spending on infrastructure upgrades, passing immigration reform and raising the federal minimum wage. Combined with monetary policy focused on the goal of lowering unemployment for those facing the highest rates, stronger bargaining power would lead to a more inclusive, higher-quality labor market.
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“The underlying details were soft”, he said, pointing to the deceleration in wage growth and the decline in the workweek. We maintain our call of a September rate hike. Job gains slowed across most major industries and employers cut workers in manufacturing, construction and mining. The health-care and social-services sector added 36,100 jobs. This sub-50 reading signaled the first contraction in United States manufacturing in six months.
