The U.S. economy added about 130,000 jobs in August – lower than expectations – and average hourly earnings were up 0.4% month-over month and 3.2% year-over-year – above expectations – according to estimates from the Bureau of Labor Statistics.
The unemployment rate was flat compared with July at 3.7%.
The labor force participation rate was also flat at 63.2%.
The employment-population ratio edged up slightly to 60.9%.
The BLS report was somewhat at odds with the ADP jobs report released on Thursday, which came in at 195,000 – significantly higher than the 149,000 analysts had been predicting.
As per the BLS report, there were significant job gains in the federal government, largely reflecting the hiring of temporary workers for the 2020 Census.
Job gains also occurred in healthcare and financial activities, while mining lost jobs.
Average hourly earnings for all employees increased by 11 cents in August to $28.11, according to the BLS report.
The wage increase in August follows 9-cent gains in June and July.
Odeta Kushi, deputy chief economist at First American, says the recent increases in average wages should help further boost the economy.
“Approximately 70 percent of U.S. economic growth is driven by consumer spending,” she says. “The outlook for consumer economic strength remains strong, given that jobs are plentiful and wages are rising.”
“Higher wages prompted a 2.7 percent increase in household income in August, the highest rate of growth since March of this year,” Kushi adds. “While recent yield curve inversion stokes the flame of recession talk, measures of the real economy – such as jobs and wage growth, remain strong.
“Indeed, it is household income that drives consumer spending and house buying, so it appears the U.S. consumer remains healthy and poised to spur more growth.”
