|Jobs report: 9.7 percent unemployment
DENVER—Today, the U.S. Department of Labor’s Bureau of Labor Statistics released the August jobs report. Total nonfarm payroll employment increased by 151,000 in August, and the unemployment rate remained at 4.9 percent. Each month on what is called “jobs day,” the Bureau of Labor Statistics releases a huge package of data, providing unique points on the overall employment situation. The official unemployment rate of 4.9 percent, is known as the “U-3” number. Other metrics in the report provide a fuller picture of the true unemployment rate, one of them being the U-6 rate, which is 9.7 percent.
According to CNBC, with the 151,000 jobs added in August, we have netted more than 10.5 million jobs since President Barack Obama took office, or in other words, half the jobs added during Bill Clinton’s presidency and less than those added under Ronald Reagan. The Wall Street Journal produced an in-depth report, “The August Jobs Report in 15 Charts,” which can be viewed here.
Advancing Colorado Executive Director Jonathan Lockwood released the following statement:
“Minorities and young people are seeing disproportionately high unemployment rates and they are being exploited by unfair policies. Far too many Americans are unemployed, underemployed, and totally discouraged by jobs reports like today’s. We must do better and enact pro-growth policies that empower workers and grow the economy for all Americans.”
Among the major worker groups, the unemployment rates for adult men (4.5 percent), adult women (4.5 percent), teenagers (15.7 percent), Whites (4.4 percent), Blacks (8.1 percent), Asians (4.2percent), and Hispanics (5.6 percent) showed little change in August. (See tables A-1, A-2, and A-3.) The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 2.0 million in August. These individuals accounted for 26.1 percent of the unemployed. (See table A-12.) Both the labor force participation rate, at 62.8 percent, and the employment-population ratio, at 59.7 percent, were unchanged in August. (See table A-1.)
Employment in mining continued to trend down in August (-4,000). Since reaching a peak in September 2014, employment in mining has declined by 223,000, with losses concentrated in support activities for mining. Employment in several other industries–including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, temporary help services, and government–changed little over the month.
The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.3 hours in August. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.6 hours. (See tables B-2 and B-7.)
According to Bloomberg, traders saw about a 22 percent probability of a Fed rate increase this month, down from 34 percent before the report, and a 55 percent probability of a hike in 2016, down from 59 percent, according to futures data. Average hourly earnings rose 0.1 percent from a month earlier to $25.73, following a 0.3 percent increase in the prior month. The year-over-year increase was 2.4 percent, compared with 2.7 percent in the 12 months through July.
This report reflects only August’s labor market’s performance, but it offers the last major piece of economic news before the central bank’s scheduled gathering on Sept. 20 and 21.
“This morning’s report is good but probably not good enough,” to persuade the Fed to raise interest rates in September, said Carl R. Tannenbaum, chief economist at Northern Trust in the New York Times. “It confirms that the economy is performing well, but does not provide the threat of overheating that might have caused an interest-rate increase sooner rather than later.”
A recent PwC survey of private companies found fewer than half of respondents planned to increase their staffs in the coming year, a decrease from the first quarter of 2016.
Ken Esch, a partner at PricewaterhouseCoopers, an accounting and consulting network also known as PwC, told the New York Times, “Companies expect to increase wages less than 3 percent. The head count increases are below what we’d like to see or expect to see coming out of a recession.”
“This mixed jobs report puts the Fed in a tricky situation. It’s not all around strong enough to assure a September interest rate hike. But it’s solid enough to engender a heated policy discussion,” said Mohamed el-Erian, chief economic adviser at Allianz, in Newport Beach, California, according to Reuters.
The full jobs report can be viewed here.