September 01, 2017
The Bureau of Labor Statistics reported that the economy added 156,000 jobs in August, somewhat less than most economists had expected. This figure, combined with downward revisions of 41,000 to the prior two months data, brought the average over the last three months to 185,000. The household survey also showed some evidence of weakness with the unemployment rate edging up to 4.4 percent and the employment-to-population ratio falling back 0.1 percentage point to 60.1 percent. Perhaps more noteworthy was a drop of 0.3 percentage points in the employment rate of prime-age (ages 25 to 54) workers to 78.4 percent.
Other data in the household survey were mostly positive. The number of people involuntarily working part-time fell by 27,000; it is now only slightly larger as a share of the workforce than before the recession. The number of people choosing to work part-time went up by 187,000, reaching a new high. This number has increased by more than 2.6 million since the end of 2013 when the Affordable Care Act took effect. It indicates that many people are taking advantage of the opportunity to get insurance outside of employment and therefore opting to work part-time.
Wage growth continues to be moderate, with the average hourly wage up 2.5 percent over the last year. The annual rate of increase in the average hourly wage, comparing the last three months with the prior three months, is also 2.5 percent. As a result of the weak growth in the hourly wage and a modest decline in the length of the average workweek, average weekly earnings actually fell slightly in the month.
The job growth in the establishment survey was unusually concentrated in the good producing sector, which accounted for 70,000 new jobs. Manufacturing led the way with a gain of 36,000, of which 13,700 were in autos. Construction added 28,000 jobs, an unusually large gain. Mining added 6,500 jobs as a result of a gain of 6,800 jobs in support activities for mining. Coal mining jobs were unchanged and now stand 2,100 above their year-ago level. Job growth in health care was just 20,200, down from an average of about 27,000 over the last year. Job growth in restaurants was also weak at 9,200.
