U.S. job report for August falls short than expected

The Bureau of Labor Statistics reported that the U.S. economy has added 130,000 jobs in August. The number falls short of the 150,000 jobs estimated by Wall Street. The shortfall has pulled the monthly job growth down to about 143,000 for the year.

Compared to last year, there has been a nearly 30% percent decline. In 2018, the monthly growth averaged around 208,000 jobs each month.

A large part of the jobs added is due to the addition of 34,000 government jobs including the hiring of temporary Census workers for the 2020 population count. In the manufacturing industry, only 3,000 jobs were added which is considered to be a disappointing number.

The biggest chunk of the job gains for August was due to professional and business services. There were 37,000 added jobs. As for healthcare, 24,000 positions were filled. There is a strong demand for nurses, physical therapists, and home health aides. The financial service sector gained 15,000 jobs.

The retail sector saw a decline of 11,000 jobs. The trade, transportation, and utility sectors also lost 11,000 positions. The mining and logging industries lost 5,000 jobs.

If government hiring was to be excluded, private payrolls grew by just 96,000. This is said to be the lowest pace since February 2019.

According to the report, there are over 157.9 million employed Americans. There was also an increase in labor force participation. The increase rose to 63.2% which is said to be the highest level since August 2013.

In terms of unemployment, the rate for August remained at 3.7%. The figure is still the lowest unemployment rate recorded since December 1969. Despite the slowdown, more people joined the labor force in August 2019.

For August, the wage growth has also remained solid. The average hourly earnings have increased by 0.4% for the month and 3.2% over the year. Both figures were one-tenth of a percentage better than expected.

The most recent pay data is suggesting that workers are still not gaining from the longest economic expansion in the history of the United States. The slow income growth is still seen as one of the weakest parts of the U.S. economy.

While the unemployment rate dropped and the economy expanded, the wage growth is still lagging behind. In a nutshell, when inflation is put into consideration, workers are only making 1.4% more than they did a year ago.

While the job growth has slowed down for August, there is still a labor shortage in the country. For over a year now, the U.S. has been dealing with not having enough workers.

For the first time since the Department of Labor began tracking job turnover about 20 years ago, the number of job openings each month is higher than the number of people who are searching for work. Employers in the United States have been struggling with filling open positions.

The slowdown also comes at a time that the U.S. economy is experiencing a decline with fears of an upcoming recession. While consumers remain strong and confident, the agricultural and manufacturing sectors have seen drops as well. These are said to be related to the current trade war of the United States and China over tariffs.

“Hiring in the U.S. is slowing, but not stopping. That should help to contain fears of a recession in the near-term. As this report fades into memory, the expectation is that the U.S. economy will continue to grow in the months ahead, but the risks of a recession are heightened,” said Mark Hamrick, senior economic analyst at Bankrate.com.

Democratic National Committee Chair Tom Perez also had something to say regarding the news of the August job report.

“President Trump’s erratic behavior and reckless economic policies are causing uncertainty and angst for the American worker. Wage growth is flat. Manufacturing is in decline. And job growth continues to slow/ Instead of building an economy that works for everyone, he spends all day on Twitter spewing obvious lies and petty insults,” said Perez.

Be the first to comment on "U.S. job report for August falls short than expected"

Leave a comment

Your email address will not be published.