The American economy gained a meager 187,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at an even more meager 97,000 jobs. The headline unemployment rate increased to 3.8%.
Unemployment rose by 514,000, most of them people who entered the labor force but don't yet have jobs. In addition the employment numbers for June and July were revised downward by a combined 110,000.
This is not a good report.
UPDATE: I originally reported that 525,000 people dropped out of the labor force, but I got the sign backward. Actually, 525,000 people entered the labor force in August.
Not bad either. If the trend in jobs levels off here, it would be soft landing. But is it too good for the Fed?
Interest rates are having the desired effect and hopefully that mean no more rate increases in the immediate future
At the current very low unemployment rate, any positive number of net new jobs is remarkable. Effective full employment is always going to involve a non-zero unemployment rate, just because of churn if for no other reason, and most economists will tell you that the current unemployment rate is very close to the effective full employment rate.
At some point "net new jobs" translates to "net new vacancies" rather than to "reduced unemployment".
It's a lot easier to visualize what's going on when you look at total non-farm employees. Yes, the job market is slowing down. It looks like it has a bit more to expand before it stalls completely, though it's not obvious that it will stall for more than a few months. Consumer spending has not relented, after all.
The uptick in the unemployment number was impacted by the shutdown of the Yellow trucking company last month, which threw tens of thousands of truck drivers out of work (probably fairly temporarily -- there's still a lot of demand for truckers and most of them will find new work in pretty short order; no idea if those will count as "new jobs" in next months stats, tho).
What will really ding the economy is if there's a government shutdown this fall, which some of the nuttier members of the House GOP are pushing hard for. They didn't get their debt default earlier this year, so they've decided to take passing a budget hostage next. This *never* works for them, but as they say, the very definition of insanity...
Here's hoping Jerome "I Like People Losing Their Jobs Better Than Lettuce That's 50 Cents Higher Than I Want To Pay" Powell likes this report.
I think you’ve got the “525,000 dropped out of the labor force” stat wrong.
https://www.bls.gov/news.release/empsit.a.htm
According to the household survey, the labor force *increased* by (a whopping) 736,000 people. The number of people *not* in the labor force *decreased* by 525,000 (overall population increased by 211,00).
I’m curious what a good report looks like to you. More people joining the workforce would normally be considered good news….
I was going to say, I've already seen like 5 people cite your numbers, so I knew Kevin had screwed up. He's very committed to the "inevitable recession" idea, so I think he just assumed the work force must have shrunk.
Wonder if he'll bother to make a correction, not just to etc number, but also to his conclusion.
In a full-employment economy, it seems to me that any report that shows above 90,000 jobs is very good, right? If all we need is 90,000 to keep up with population growth, the numbers say we are doing that, and then pulling more people off the sidelines and into the workforce. I know you believe we are headed into a recession (and it's possible you're right). But I think you are letting that view shade you away from objectivity in looking at the data.