August Report Positive on Jobs and Earnings
Guest blog by Dr. Tom Cunningham, Economist and MST Advisory Services, Senior Advisor- Economics
The September 7 national Employment Situation Report from the Bureau of Labor Statistics showed a net gain of 201,000 jobs for the month of August, 10,000 more than expected. It’s a strong number, if somewhat compromised by the lower than expected 157,000 jobs reported for July as well as a downward revision of 50,000 jobs to the combined May and June reports.
Other featured employment figures pretty much held steady. The U3 or headline unemployment rate remained at 3.9 percent – it was expected to slip by 0.1 percentage point – and the broader U6 measure of labor underutilization dropped by 0.1 percentage point to 7.4 percent.
Perhaps most notable in the report is a respectable rise in average hourly earnings, up 2.9 percent from a year ago, .2 percent better than expected.
As to industry sectors, professional services saw the largest gains, followed by health care, construction, wholesale trade, transportation, and mining. Manufacturing employment fell slightly, and the other sectors were essentially unchanged.
Overall, the August report reflects a healthy U.S. economy. It is particularly noteworthy encouraging relative to earnings, an indication that tightness in the labor market may be beginning to bite and the beginning of the increase in wages we’ve been expecting.
About the Author
Tom Cunningham holds a Ph.D. in economics from Columbia University and was senior economist with the Federal Reserve Bank of Atlanta from 1985 to 2015. Mr. Cunningham serves as a consultant to MST in the creation and ongoing development of the MST Virtual Economist and is the MST Advisory economics specialist.
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