Slow Job Growth Should Give Us Pause
Today’s jobs report showed the economy added 142,000 jobs in August, far below expectations of job growth closer to 230,000. Prior to August, monthly job growth averaged 226,000 this year. The figure below charts monthly job growth since the start of the recovery in July 2009. While the general trend has gone up, this month’s job growth was disappointingly below trend. We haven’t seen job growth this slow since December of last year.
While it’s yet to be seen whether this slower job growth is an anomaly or a new trend, these numbers should give us pause. Adding in this month’s disappointing numbers, job growth this year is still above last year’s average at this time. Job growth has averaged 215,000 jobs a month thus far in 2014, compared to 197,000 in the first eight months of 2013. We need to be consistently adding jobs at a much faster rate to return to the labor market conditions before the recession began. Arguably, that standard is a low bar as the labor market at that time still had considerable slack.