In August, the US economy added 187,000 jobs, but the jobless rate rose to 3.8%, which was a surprise.
Friday’s Bureau of Labour Statistics figures showed that the US economy added 187,000 jobs in August. However, unemployment rose unexpectedly as the labour market continued to show signs of slowing down.
In August, the unemployment rate went up from 3.5% to 3.8%, the highest it has been since February 2022. Economists thought that unemployment would stay the same at 3.5%. Economists polled by Bloomberg believed the economy would add 170,000 jobs in August that were not in farming.
Friday’s changes to the July and June jobs reports showed that 110,000 fewer jobs were added in those months than was previously thought. In the last year, the economy has added an average of 271,000 jobs per month. In the previous nine months, the economy has only added more jobs than this twice.
Wages, which show workers’ power in the job market, went up less than expected last month, by 0.2% month-to-month and 4.3% over the past year. Economists thought wages would increase by 0.3% this month and 4.3% this year. In July, wages had gone up 4.4% over the past year.
The number of people working or looking for work went up to 62.8%, the highest amount since February 2020. The average hours worked each week also increased, from 34.3 in July to 34.4 in August.
On Friday, Ellen Zentner, the chief US economist at Morgan Stanley, wrote, “August payrolls were stronger than expected, but there were also big downward revisions to June and July, which shows a trend of slower job growth. Today’s report shows that the job market is still getting worse, but it’s not falling off a cliff.”
According to the figures released on Friday, the most jobs were added in healthcare, which added 71,000 jobs.
Only 40,000 jobs were added to the entertainment and hospitality sector, less than the 12-month average of 61,000 jobs. The BLS said that employment in this field is still about 1.7% lower than before the pandemic. There are now 22,000 more jobs in construction.
Thirty-four thousand fewer jobs were in transportation and storage. The BLS says that the number of jobs in trucking fell sharply, by 37,000. In August, Yellow, a company that runs trucks, filed for bankruptcy.
Last week, Jerome Powell, the head of the Fed, said that the labour market balance was “incomplete.” Powell has said many times that getting inflation back down to the Fed’s goal of 2% will take “some softening in labour market conditions.”
“We expect this rebalancing of the labour market to continue,” Powell said at the Jackson Hole Economic Symposium. “There could be a need for a change in monetary policy if there is evidence that the tightness in the labour market is not improving.”
Since Powell’s speech, early signs from other economic data suggest that the US economy may slow down after a stronger-than-expected summer.
On Wednesday, ADP released new data showing private companies added 177,000 jobs in August; this is a significant drop from July when 371,000 jobs were added. In July, the number of job openings fell below 9 million for the first time in more than two years, according to the latest Job Opening and Labour Turnover Survey, or JOLTS, report. On top of that, a consumer confidence poll showed that Americans are more worried about the job market.