U.S. Jobs: August Numbers = Grey Clouds with No Silver Lining

The latest Employment Situation Summary is out from the U.S. Bureau of Labor Statistics this morning. It shows further slowdowns in job growth for August, with 130,000 jobs added. Given that 28,000 of those jobs are temporary, census-related hires, one could argue that the "real numbers" are 102,000 non-government, private sector jobs.

This is a little bit scary. Monthly numbers have been below 100,000 twice already this year — in February (56,000 jobs added) and May (62,000) — and this month is right on the edge. Furthermore, June and July numbers were revised downward by an aggregate of 20,000 jobs (-15,000 for June, -5,000 for July).

Job gains have averaged 156,000 over the past 3 months, and 175,000 monthly for all of 2019. Alas, that shows a clear downward trend (previous quarter average is down by about 11 percent vis-�-vis the current monthly 2019 average).

There's not a lot to like here, though unemployment remains unchanged at a low 3.7 percent. One slight plus in this month's numbers is on the wages side, which shows an eleven-cent hourly gain to $28.11 per hour, following $0.09 gains for June and July. For the trailing 12-month period, wages are up by 3.2 percent (or about $0.90 an hour).

Thus about one-third of that gain has come for those three months, which shows a slight (but modest) increase in the rate of wage growth. It remains interesting and puzzling that tight employment has stubbornly refused to correlate with more rapid wage increases, as is more typically the case.

Most economists are inclined to see this as a function of companies sitting on cash, rather than hiring more workers.

Where's the Growth for August, Such as It Is?

Other than those census jobs, the leading source of job growth in August came from professional and business services. This sector added 37,000 jobs for August, with a bump of 10,000 jobs in the sub-area of computer systems design and related services. For 2019, job growth for professional and business services has averaged 34,000 jobs. August bucked that trend slightly upward, but the average for 2019 is 13,000 per month fewer than 2018's 47,000 monthly average.

Health care added 24,000 jobs, as compared to a monthly average of nearly 33,000 over the past 12 months. Social assistance was up by 13,000 jobs, as compared to a monthly average of just over 8,000 for the last year. As the decrease in overall jobs added mandates, job growth rates appear to be falling in most sectors where growth is occurring.

Source: U.S. Bureau of Labor Statistics Current Employment Statistics for August 2019

On the downside, mining was down by -6,000 jobs in August and retail trade employment dipped by -11,000 jobs. Other sectors were flat with little or no change in construction, manufacturing, transportation and warehousing, information, and leisure and hospitality.

The BLS also observes that, "Job growth in these industries has moderated thus far in 2019 compared with 2018." NPR reports that the manufacturing sector is "battered by the U.S. trade war with China" and that "the factory sector shrank in August for the first time in three years."

Experts who are quoted by NPR, however, are quick to observe that "we haven't had a manufacturing-led recession for 50 years" and that even though "manufacturing is probably in a recession already, that need not bring down the larger economy" (Jared Bernstein, economist for the progressive-leaning Center on Budget and Policy Priorities).

Is it just me, or does the whole job market (and economy in general) seem to be holding its breath, waiting for something to happen? Here's hoping that a silver lining will manifest, and quickly. Right now, I don't see much cause for celebration. Stay tuned, and we'll see which way the wind blows next!