Published: Sat, September 02, 2017
Money | By Oscar Reynolds

USA job growth slows in August

USA job growth slows in August

August's underemployment rate (the U-6 unemployment rate), which includes those out of work and those working part-time but who would like to have full-time work, stood at 8.6%, unchanged from July. (The data are not seasonally adjusted.) Discouraged workers are persons not now looking for work because they believe no jobs are available for them.

The civilian labor force participation rate was 62.9%, the same as in July.

As usual, there were revisions to the prior two months' job growth. The figure for July was revised down to 189,000 from an initial 209,000, while for June number was reduced from 231,000 to 210,000, compounding the weaker picture.

Still, the average job growth for the past 3 months is 185,000 according to government data. The US economy needs about 100,000 jobs per month to keep up with population growth.

The ranks of the unemployed rose by 151,000 to 7.13 million, while the employment level fell 74,000 to 153.4 million.

Private employment rose by 165,000 in the latest month, below the 173,000 forecast, and far below the 237,000 reported this week by payroll services firm ADP. Professional and business services saw the biggest gains in August, with payrolls in this sector rising by 40,000. Given the choppiness of the data from month to month, a soft August should not be of great concern, though, and there were encouraging signs such as the job gains in cyclical industries such as manufacturing and construction.

The economy expanded at a healthy 3% annual pace in the April-June quarter, a substantial increase from a weak 1.2% in the first three months of the year.

Wage growth was also a disappointment, with average hourly earnings rising 0.1% over the prior month and 2.5% over past year. Average weekly hours were actually down, sufficiently so as to drive average weekly earnings down from last month's report.

As for what all those workers are getting paid - wages remain in a "hold" pattern, with barely a gain seen all year.

But Ian Shepherdson, chief economist at Pantheon Macroeconomics, says the August wage increase was likely artificially low because the survey was completed before the 15th of the month when many workers get a paycheck.

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