The Bureau of Labor Statistics reported that the unemployment rate fell to 3.7 percent in September, its lowest level since 1969. The report indicated that some slowing of job growth occurred during the month with employers adding 134,000 jobs. This figure may have been reduced by the Hurricane Florence hitting the Carolinas. Job growth estimates for July and August were revised upward by 87,000, bringing the three-month average to 190,000. This pace of nonfarm job growth at 1.7 percent has remained little changed over the last couple of years. Thus far, 2018 is shaping up to be one of the stronger years of job growth since the Great Recession.
Job growth was strong in the goods producing sectors but generally weak in the services sectors. Construction added 23,000 jobs in September; while manufacturing and mining and logging added 18,000 and 5,000 jobs respectively. While employment growth was strong in these sectors, it was accompanied by a drop in hours, resulting in the index of aggregate hours falling in both construction and manufacturing, as did average weekly pay. On the services side, retail lost 20,000 jobs while restaurants lost 18,200 jobs. Both of these sectors most likely were affected by the hurricane, disrupting hiring in these high job turnover sectors. Health care added 25,700 jobs in September and state education added 21,200 jobs; the latter due most likely to seasonal adjustment issues.
In spite of the unusually low unemployment rate there is sparse evidence for wage acceleration. Year-over-year increase in the average hourly wage was 2.8 percent; down from last month’s 2.9 percent. However, the annualized increase for the last three month average (July, August and September) compared with the previous quarter (April, May and June) is 3.4 percent. Most gains are only marginally higher than the inflation rate.
The 3.7 percent unemployment rate is the lowest in nearly a half century. Broader measures of unemployment—which include discouraged workers who have given up looking for work—declined to its lowest level since 1994. The broadest measure of underemployment, which includes part-time workers who would like full-time work, still remains higher compared to the late 1990s and early 2000s. The share of the population that is in the labor force—defined as those working or actively searching for work—has remained slightly lower than 63 percent this year. This labor force participation rate has not seen much improvement, nor conversely deterioration over the last five years. Unemployment rates have trended downward for workers of all races and genders in recent years. The unemployment rates for white women, black men and Hispanic women are all at their lowest levels in several decades.
The full press release on the September 2018 employment situation can be accessed in the pdf below.
The next employment situation report for October 2018 is scheduled to be released on Friday, November 2, 2018.
The Bureau of Economic Analysis released its third estimate of second quarter 2018 Gross Domestic Product. The third estimate of 4.2 percent annual growth is based on more complete source data than were available for the second estimate issued last month (August 2018), which also calculated a 4.2 percent annualized growth rate. However, the latest estimate reflects a downward revision to private inventory investment which was offset by small upward revisions to most other GDP components. Imports, which are a subtraction in the calculation of GDP, were revised down slightly.
Secretary of Administration Susanne Young announced official revenue collections result for August of Fiscal Year 2019. All three major fund aggregates-the General Fund, Transportation Fund, and Education Fund-were above their monthly targests.
Please review the pdf below for more information.
According to the Bureau of Labor Statistics, the Consumer Price Index for all urban consumers (CPI-U) increased 0.2 percent in August of 2018 on a seasonally-adjusted basis. An increase in the index for shelter was the main contributor to the monthly increase.
Excluding the volatile food and energy categories, prices increased by 0.1 percent in August. The indexes for used cars and trucks and airline fares increased in August while apparel, medical care, communication, and personal care all declined.
After a build-up in inflation through much of the year, consumer price pressures moderated in August; a positive sign for workers who have seen larger paychecks mostly eaten up by price increases. From a year earlier, prices rose 2.7 percent, a slowdown from the near 3 percent gain in the prior two months of June and July.. Core inflation rose 2.2 percent from a year earlier; also slightly slower than July’s annual gain.
The full press release can be found via the pdf below.
Next release is Thursday, October 11, 2018, for the September 2018 Consumer Price Index.
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.