Weak Jobs Report Signals Slowdown is Looming


The U.S. economy added 187,000 jobs in August – less than expected – while the unemployment rate rose to 3.8%, according to the U.S. Bureau of Labor Statistics.

The number of unemployed persons increased by 514,000 to 6.4 million.

Job gains were seen in health care, leisure and hospitality, social assistance, and construction.

The labor force participation rate increased by 0.2 percentage points to 62.8%.

Average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents, or 0.2%, to $33.82.

Over the past 12 months, average hourly earnings have increased by 4.3%.

Average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents, or 0.2%, to $29.00.

“Recall that the formula for the unemployment rate is the number of unemployed divided by the labor force,” explains Odeta Kushi, deputy chief economist for First American, in a statement. “In August, the size the labor force increased by 736,000, so there were both more people working and more people looking for work. The labor force participation rate increased by 0.2 percentage points.”

“Average hourly earnings ticked up by 0.2 percent in August and is up 4.3 percent from a year earlier, which is in line with expectations,” Kushi says. “August’s jobs report is signaling that the labor market is solid but slowing. Unemployment did increase, but it was for mostly the ’right’ reason – more labor supply. Labor demand is cooling, labor supply increased, and wage growth is gradually moderating. Cooling is good from the perspective of the Federal Reserve.”

“Construction employment continued to trend up in August, adding 22,000 jobs, in line with the average monthly gain of 17,000 jobs over the prior 12 months,” she says. “Residential building construction employment increased by 2,400 jobs, while non-residential increased by 1,800.”

“Non-residential building jobs hit a record high in August, while residential building jobs are down 1 percent from the peak hit earlier this year,” Kushi adds. “Within the industry, employment growth was highest for non-residential specialty trade contractors and in heavy and civil engineering construction.”

Photo: Saulo Mohana

Notify of
Inline Feedbacks
View all comments