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Wall Street to Your Street
US Jobs Increase in August but Growth Rate Slows
September 7, 2016 | Russ Swansen, Chief Investment Officer
U.S. employers added 151,000 new nonfarm employees in August, according to the latest U.S. Department of Labor employment report issued Sept. 2 (Exhibit 1). The August new job results fall well below the more than 270,000 jobs created in each of the two previous months.
The unemployment rate remained unchanged at 4.9%, with a total of approximately 7.8 million unemployed persons currently looking for work (Exhibit 2).
The number of long-term unemployed (those jobless for 27 weeks or more) also remained at the same level – approximately 2.0 million Americans – which accounted for 26.1% of the unemployed (Exhibit 3).
The labor force participation rate also stayed the same at 62.8%.
The report also noted several other employment trends:
- The average workweek declined by 0.1 hours to 34.3 hours (Exhibit 4).
- Average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $25.73. Year over year, average hourly earnings have increased by 2.4%.
- Initial unemployment claims, a leading indicator, continue to remain at a historically low level (Exhibit 5).
While the Federal Reserve is expected to consider approving a rate hike when it meets Sept. 20 to 21, the slower job growth may discourage the board from raising rates. (See “Where’s That Rate Hike? See You In September?”)A weak retail report in August, as well as weakness in several other areas of the economy, such as corporate earnings and manufacturing output levels, could also sway the Fed to delay a rate hike once again. The Fed has not raised rates since December 2015.
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All information and representations herein are as of Sept. 2, 2016, unless otherwise noted.
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