BLS Releases August Employment Situation (Sept. 2018)
The Bureau of Labor Statistics reported that nonfarm payroll employment increased by 201,000 in August. Downward revisions of 50,000 to the prior two months’ data brought the three-month average gain to 185,000. Job gains were concentrated in a small number of sectors: professional and business services, construction, health care, wholesale trade, transportation and warehousing, and mining. After increasing for 12 consecutive months, manufacturing employment fell by 3,000 in August. Weakness in manufacturing also shows up in the index of hours, which declined in August; as well as a weakening manufacturing diffusion index, which indicates the percent of employers intending to add workers.
The unemployment rate remained at 3.9 percent, and the number of unemployed persons, at 6.2 million changed little. Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.6 percent), teenagers (12.8 percent), Whites (3.4 percent), Blacks (6.3 percent), Asians (3.0 percent) and Hispanics (4.7 percent) showed little or no change in August.
Long-term unemployed—those jobless for 27 weeks or more—was little changed in August at 1.3 million and account for 21.5 percent of the unemployed. Over the year, the long-term unemployed has declined by 403,000. The number of persons employed part-time for economic reasons—referred also as involuntary part-time workers—stands at 4.4 million; relatively unchanged over the month, but down by 830,000 over the year.
Both labor force participation rate—at 62.7 percent, and the employment-population (EPOP) ratio—at 60.3 percent, declined by 0.2 percentage points in August. The 0.2 percentage point drop in EPOP showed up also for prime-age workers (age 25 to 54). For men, the year-over-year increase in EPOP is 1.1 percentage points, while for women it is 0.8 percent. For both men and women, EPOPs remain below pre-recession peaks and well below the peaks reached in 2000.
The most encouraging news in the report is evidence of a modest acceleration in wage growth. The average hourly wage increased by 2.9 percent over the last year. That compares to a 2.7 percent year-over-year rise in July. Though too early to assume a clear trend, the average of the last three months compared with the prior three months is slightly more rapid at 3.1 percent. Pay gains are not especially strong in areas where employers have been complaining of labor shortages. The average hourly wage in construction was up 3.3 percent over the past year, but the gain was 3.5 percent back in September 2016. Wages in manufacturing have risen by just 1.8 percent over the last year.
The overall picture in the August jobs report is overwhelmingly positive. The economy continues to generate jobs at a very healthy pace and there is some modest evidence that wage growth may be accelerating so that wages at least slightly outpace the rate of inflation.
The full press release on the August 2018 employment situation can be accessed in the pdf. below.
The next employment situation report for September 2018 is scheduled to be released on Friday, October 5, 2018.