U.S. economy adds 201,000 jobs despite hiring woes, unemployment steady at 3.9%

by Wesley Brown ([email protected]) 173 views 

More than 200,000 jobs were added to the expanding U.S. economy in August although the total number of new workers on payrolls in June and July was revised downward by 50,000, the U.S. Labor Department’s Bureau of Labor Statistics (BLS) reported Friday (Sept. 7).

Overall, the U.S. jobless rate remained unchanged at 3.9% as total nonfarm payroll employment increased by 201,000 in August. Job gains primarily occurred in professional and business services, health care, wholesale trade, transportation and warehousing and mining, which includes the nation’s rapidly growing oil and gas industry.

After touching a 20-year low of 3.8% in May, the nation’s unemployment rose to 4% in June as the number of unemployed workers has held at around 6.3 million. A year earlier, the nation’s jobless rate was 4.4% and the number of unemployed persons held at nearly 7.1 million.

The August job tally is consistent with the U.S. average of nearly 196,000 job adds per month over the past year, BLS data shows. Two weeks ago, the Arkansas jobless rate dipped back to near-record territory at 3.7% after remaining fixed at 3.8% since February.

Despite the strong job report after the nation’s long Labor Day weekend, there are still some indications that employers may have difficulty filling some jobs heading into the fourth quarter and the holiday season. In the ADP National Employment Report released Thursday, the number of private sector jobs increased by only 163,000, down significantly from 217,000 in the previous month.

“Although we saw a small slowdown in job growth, the market remains incredibly dynamic,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Midsized businesses continue to be the engine of growth, adding nearly 70% of all jobs this month, and remain resiliant in the current economic climate.”

Mark Zandi, chief economist of Moody’s Analytics, added: “The job market is hot. Employers are aggressively competing to hold onto their existing workers and to find new ones. Small businesses are struggling the most in this competition, as they increasingly can’t fill open positions.”

In some sectors, the tight labor market conditions and difficulty in finding skilled laborers and highly qualified professionals is hiring managers and firms to change the way they recruit and compensate workers in key industries. Last week, the Associated General Contractors of America (AGC) and Autodesk released a report noting that 80% of construction firms are having a hard time filling hourly craft positions that represent the bulk of the construction workforce.

“Labor shortages in the construction industry remain significant and widespread,” said Ken Simonson, AGC’s chief economist. “The best way to encourage continued economic growth, make it easier to rebuild aging infrastructure and place more young adults into high-paying careers is to address construction workforce shortages.”

The labor shortages come as demand for construction continues to grow, Simonson said, adding that construction employment expanded between July 2017 and July 2018 in 281 out of 358 metro areas that the association tracks — or every three out of four firms. That growing demand for construction workers helps explain why 81% of those firms also report it will continue to be hard, or get harder, to find hourly craft workers in the year ahead.

Among the major worker groups, the jobless rates for adult men (3.5%), adult women (3.6%), teenagers (12.8%), Whites (3.4%), Blacks (6.3%), Asians (3%), and Hispanics (4.7%) showed little or no change in August. The labor force participation rate and the employment-population ratio both declined 0.2 percentage points in August to 62.7% and 60.3%, respectively.

Among the unemployed, the number of reentrants to the labor force in August rose to 1.85 million, following a decline in July to 1.8 million. The number of long-term unemployed, or those jobless for 27 weeks or more, was essentially unchanged at 1.3 million in August and accounted for 21.5% of the unemployed.

The number of persons employed part time for economic reasons was 4.4 million, down by 830,000 over the year. There were 1.4 million marginally attached workers in the U.S. labor force, little different from a year earlier. These individuals were not in the labor force, but wanted and were available for work and had looked for a job sometime in the past year.

Among the 201,000 job additions in July, professional and business services added 53,000 jobs in August and 519,000 jobs over the year. Health care employment, which has added 301,000 jobs over the past 12 months, rose by 33,000 in August with job gains in ambulatory health care services and hospitals.

Wholesale trade employment increased by 22,000 in August and by 99,000 over the year. Durable goods wholesalers added 14,000 jobs over the month and accounted for about two-thirds of the over-the-year job gain in wholesale trade.

Employment in transportation and warehousing rose by 20,000 in August and by 173,000 over the past 12 months. Within the industry, couriers and messengers added 4,000 jobs in August. Mining employment increased by 6,000 in August, after showing little change in July. Since a recent trough in October 2016, the industry has added 104,000 jobs, almost entirely in support activities for oil and gas sector.

Despite industry challenges, employment in construction continued to trend up in August and has increased by 297,000 over the year. Surprisingly, manufacturing fell by 3,000 in August but overall employment in the industry was up by 254,000 with more than three-fourths of the gain at durable goods factories.

The average workweek for all employees on private nonfarm payrolls was unchanged 34.5 hours in August. In manufacturing, the workweek held steady at 41 hours and 3.5 hours of overtime. The average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $27.16. Over the year, average hourly earnings have increased by 77 cents, or 2.9%.

Facebook Comments