The U.S. economy added just 130,000 jobs in August, according to the Bureau of Labor Statistics (BLS). Given the sizable downward revisions of half a million jobs from March 2018 to March 2019, today’s modest employment number brings average monthly job growth this year so far down to 143,000, compared to a stronger 208,000 jobs created on average in the first eight months of last year. The private sector saw a slower 96,000 jobs added while government employment rose by 34,000. The vast majority of this increase (27,300) was in the non-postal federal sector, largely due to an uptick in hiring in advance of the upcoming decennial census. The BLS reports that 25,000 temporary workers were hired to prepare for the 2020 Census.
The unemployment rate remained at 3.7% in August. The labor force participation rate edged up 0.2 percentage points to where it was when the year started, at 63.2%. The prime-working age labor force participation rate (25–54 years old) saw a significant gain in August, rising 0.6 percentage points. Like the overall labor force participation rate, it is now sitting exactly where it was at the start of 2019 (82.6%). The prime-age employment to population ratio rose as well (+0.5 percentage points) in August and is now slightly above its level in January (80.0% versus 79.9%). While the August increases are welcome, they are only just making up for the losses in participation that occurred earlier in this year.
Nominal wages grew 3.2% year-over-year in August, which is slower than expected in an economy that has had historically low unemployment—the unemployment rate has been at (or below) 4.0 % for the past 18 months. Wage growth has been particularly disappointing because it provides further evidence that the deceleration experienced in the first half seems to be holding.
Next week, when the annual Census data on poverty and income are released, we will have a fuller picture of how working people have fared this far into the economic recovery.