Even with the hiring of 25,000 temporary government workers to begin field work for the 2020 census, the U.S. jobs report posted Friday (Sept. 6) shows that the number of total nonfarm payrolls fell by 34,000 in August and new revisions for June and July are raising concern the nation’s workforce is facing headwinds.
According to the job data from U.S. Labor Department’s Bureau of Labor Statistics (BLS), only 130,000 new jobs were added to U.S. payrolls between months as the nation’s jobless rate remained unchanged at 3.7%. U.S. job growth in 2019 has averaged only 158,000 per month thus far in 2019, well below the average monthly gain of 223,000 in 2018, BLS data shows.
“After a disappointing summer of economic data, today’s jobs figures confirm the labor market is not immune to the slowdown we’re seeing elsewhere,” said Michael Madowitz, economist with the left-leaning Center for American Progress in Washington, D.C. “While these data do not suggest a recession is around the corner, the employment situation – the most robust real-time signal of the state of the economy – eliminates any question that the economy has slowed under President Donald Trump’s administration.”
The hiring slowdown in August was well below the revised 159,000 positions posted In July and well below Wall Street expectations of 150,000 new job adds for the month. BLS officials also said June’s job tally was revised down by 15,000 from 193,000 to 178,000, and the change for July was revised down by 5,000 from 164,000 to 159,000. With these revisions, employment gains in June and July combined were 20,000 less than previously reported.
Those downward revisions come atop BLS recently revised job growth totals going back to April that have pushed average monthly job growth in 2019 to levels not seen in nearly a decade. But Acting U.S. Secretary of Labor Patrick Pizzella said the U.S. economy continued to show strength in August, touting the near record-low unemployment rate of 3.7% — the 18th straight month the unemployment rate has been at or below 4%.
“Unemployment rates for African-Americans set a new record low at 5.5% and Hispanic-Americans matched a record low at 4.2%,” said Pizella. “Since January of 2017 more than 5.8 million jobs have been created including the 130,000 jobs created in August.”
Nationally, the U.S. jobless rate remained just off a 50-year low of 3.6%. In Arkansas, the jobless rate fell in July to a record low of 3.4% in July from the 3.5% in June, and below the 3.6% in July 2018. Year-over-year, the state economy added 15,625 jobs, a 1.2% increase, BLS data showed.
Last month, Federal Reserve Chairman Jerome Powell highlighted labor market conditions in lowering the target range for the federal funds rate to 2% to 2.25%, but there are now expectations that the nation’s central bank could move those targets even lower later this month.
“This month, as in July, approximately 40% of supply managers reported that the shortage of qualified workers was the greatest economic challenge for their company for the next 12 months,” said Creighton University economist Ernie Goss said following Tuesday Mid-America Business Conditions showing economic growth has stalled below neutral growth across nine-state region stretching from Minnesota to Arkansas for the first time since the summer of 2016.
“I expect the Federal Reserve to reduce short-term interest rates again at its September meetings. Record low interest rates by global central banks and a strong U.S. dollar are pushing the Fed to continue reducing rates,” Goss said.
Madowitz and other employment experts noted that the more familiar BLS employment snapshot, known as the U-3 unemployment rate, can underestimate the number of those who are unable to find jobs. For example, he said, it does not capture the people who want jobs but have given up looking for work or the people who would like full-time work but can only find part-time positions. However, the Washington, D.C.-based economist said the lesser-known U-6 unemployment rate alleviates this problem by including marginally attached workers – those who have recently looked for work but are not currently looking – and part-time workers who would prefer full-time work. Through August, the U-6 rate was at 7.2%, up from 7% in July and two-percentage points below year ago levels.
Overall, private-sector employment was up by 96,000, with notable job gains in health care and financial activities. Employment in federal government increased by 28,000, mostly due to the hiring of 25,000 temporary workers to prepare for the 2020 Census. Among the big gainers, health care added 24,000 jobs over the month and 392,000 over the past 12 months. Financial activities, which have added 111,000 jobs in the past year, saw employment gains of 15,000, with nearly half of the gain occurring in insurance carriers and related activities.
As noted by Pizella, the unemployment rates for adult men (3.4%), adult women (3.3%), teenagers (12.6%), Whites (3.4%), Blacks (5.5%), Asians (2.8%), and Hispanics (4.2%) showed little or no change in August.
The labor force participation rate edged up to 63.2% in August, mostly unchanged from a month and year earlier. The number of persons employed part-time for economic reasons declined by nearly 397,000 to 4.4 million in August. These individuals, who would have preferred full-time employment, were working part-time because their hours had been reduced or they were unable to find a full-time job.
There were 1.6 million persons marginally attached to the labor force for the month, hardly changed from a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.
Among the marginally attached in August, there were a rise in the number of discouraged workers, or those persons not looking for work because they believe no jobs are available for them, to 467,000. The remaining 1.1 million persons marginally attached to the labor force through August had not searched for work for reasons such as school attendance or family responsibilities.
In August, average hourly earnings for all employees on private nonfarm payrolls rose by 11 cents to $28.11. Over the year, average hourly earnings have increased by 3.2%. The average workweek for all employees on private nonfarm payrolls remained at 34.4 hours in August. In manufacturing, the workweek and overtime were 40.6 hours and 3.2 hours, respectively.