US Job Growth Falls Well Short Of Estimates In August

Tammy Harvey
September 2, 2017

The U.S. Labor Department will release its latest employment numbers today for the month of August.

Federal Reserve Chairwoman Janet Yellen signaled in August that the Fed may raise its benchmark rates, but the underwhelming jobs number may cause a change in thinking. The unemployment rate for Asians was also higher, though for positive reasons: More people began actively seeking work and were counted as unemployed if they didn't immediately find a job. What we're experiencing right now represents job growth that barely suffices to absorb new entrants to the USA labor market (recent graduates and other young people entering the work force for the first time). August's gains were far more than the 75,000 to 100,000 jobs per month needed to keep up with growth in the working-age population.

Correction: An earlier version contained incorrect information on the payrolls and unemployment rate numbers.

Harvey's impact could show up in the September jobs report if many businesses in the region are still closed two weeks from now, when they collect this month's data. Since November 2016, 155,000 jobs have been added in the manufacturing sector, as manufacturers continue to express confidence in the president on issues ranging from taxes to trade.

Manufacturing added 36,000 jobs last month, while construction employment rose by 28,000. Compared with a year ago, the average pay in August was up 2.5 percent - the same modest pace in recent months. August was the 83rd straight month of job gains. Retail stores and auto dealers added just 800 jobs after having lost 1,900 in July.

The US economy grew at an annualised pace of 3 per cent in the second quarter, its fastest pace since the beginning of 2015. Average hourly earnings for non-farm payrolls rose three cents, to $26.39 per hour.

The figures made for disappointing reading for Donald Trump, who hasput jobs and wage growth among the top priorities for his administration. Earnings were expected to rise 0.2% over the prior month and 2.6% over the prior year. The rate is still down half a point from a year ago and twice that when including sources of "hidden unemployment" like discouraged workers.

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