From the jobs creation number to wages earned, August was a disappointment. However, the BLS did manage to put some lipstick on it before it’s delayed release. Here’s the breakdown…
From Zero Hedge
We warned readers yesterday to “Prepare For Disappointment” with today’s jobs report, and sure enough that’s precisely what we got when moments ago the BLS reported that in August just 156K jobs were created, a big miss to the 180K expected, and following a sharp downward revision to June and July, which were revised to 210K and 189K, respectively, a 41K drop combined. But don’t worry, the worse, the better as the more disappointing the economic data, the less likely the Fed will hike in September, December, or ever for that matter.
Not helping matters was the Household Survey, according to which the number of employed Americans declined by 74,000 to 153,439K. On an annual basis, the increase in the employment level dropped to 1.2%, the lowest since March.
The unemployment rate also disappointed, rising from 4.3% to 4.4%, while the avg hourly earnings missed, increasing by 2.5% Y/Y in August, below the 2.6% estimate and the same as July.
The sequential increase in earnings was just 0.1%, also below the 0.2% expected, and far below the 0.3% in July. Furthermore, since average weekly hours declined also, from 34.5 to 34.4, average weekly earnings declined outright from $909.42 to $907.82 in August. Furthermore, average weekly earnings rose just 2.2% Y/Y, the lowest rate of increase since January.
While the labor force participation rate remained unchanged at 62.9%, the number of Americans not in the labor force increased once again, growing by 128K in August to 94.785 million.
More details from the report:
Total nonfarm payroll employment increased by 156,000 in August. Job gains occurred in manufacturing, construction, professional and technical services, health care, and mining. Employment growth has averaged 176,000 per month thus far this year, about in line with the average monthly gain of 187,000 in 2016.
Ironically, manufacturing employment somehow rose by 36,000 in August, with Job gains allegedly occuring in motor vehicles and parts (+14,000) – at a time when virtually every car factory was furloughing workers, as well as fabricated metal products (+5,000), and computer and electronic products (+4,000). Manufacturing has added 155,000 jobs since a recent employment low in November 2016.
In August, construction employment rose by 28,000, after showing little change over the prior 5 months. Employment among residential specialty trade contractors edged up by 12,000 over the month.
Employment in professional and technical services continued to trend up in August (+22,000) and has grown by 262,000 over the last 12 months. In August, job gains occurred in computer systems design and related services (+8,000).
Health care employment continued on an upward trend over the month (+20,000) and has risen by 328,000 over the year. Employment in hospitals edged up over the month (+6,000).
Mining continued to add jobs in August (+7,000), with all of the growth in support activities for mining. Since a recent low in October 2016, employment in mining has risen by 62,000, or 10 percent.
Jobs were also weaker for waiters and bartenders, aka “employment in food services and drinking places” which changed little in August (+9,000), following an increase of 53,000 in July. Over the year, the industry has added 283,000 jobs.
The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.4 hours in August. In manufacturing, the workweek declined by 0.2 hour to 40.7 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.7 hours for the fifth consecutive month.
In August, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $26.39, after rising by 9 cents in July. Over the past 12 months, average hourly earnings have increased by 65 cents, or 2.5 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $22.12.
The change in total nonfarm payroll employment for June was revised down from +231,000 to +210,000, and the change for July was revised down from +209,000 to +189,000. With these revisions, employment gains in June and July combined were 41,000 less than previously reported. After revisions, job gains have averaged 185,000 per month over the past 3 months.
Finally, for those wondering, here is the answer: “Hurricane Harvey had no discernable effect on the employment and unemployment data for August.”
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