{"id":1591,"date":"2019-09-06T09:52:29","date_gmt":"2019-09-06T13:52:29","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1591"},"modified":"2019-09-06T09:52:29","modified_gmt":"2019-09-06T13:52:29","slug":"august-employment-report-3","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1591","title":{"rendered":"August Employment Report"},"content":{"rendered":"\n

KEY DATA:<\/strong> Jobs: 130,000; Private:\n96,000; Revisions: -20,000; 3-month ave.: +156,000; Unemployment Rate: 3.7%\n(unchanged); Wages: +0.4%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe softening in job growth should surprise\nno one but it doesn\u2019t mean the economy is headed toward a recession right away.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  The job slump, if you want to call it that,\ncontinues.  In August, payrolls rose\nmoderately, though much of the gain was from government hiring.<\/em><\/strong>  The decennial census temporary job surge is\nstarting and that added 25,000 workers, so you can say the top line number was\neven weaker than it looks.  Indeed, the\nrelatively modest private sector gain better matches what happened.  But the details are hardly negative.  Health care, professional and technical\nservices, finance and construction all posted solid increases in payrolls.<\/em><\/strong>  Manufacturing was up a touch as well.  But retail keeps shrinking and transportation\nand warehousing, which were expected to lead the way, has been largely flat\nlately.<\/em><\/strong>  That may be an early\nsign that the slowdown is gaining steam. \nAnother concern is that only 53.5% of the industries posted gains.  That was the second lowest percentage in 9.5\nyears, a further sign that firms are becoming more cautious in their hiring. <\/p>\n\n\n\n

As for the unemployment rate, that was unchanged as\na surge in workers into the labor force was largely absorbed.<\/em><\/strong>  The participation rate moved up, which is\nnice to see.  But maybe the\nbest data came from the hours worked and wages section of the report.  Hourly wages were up a strong 0.4% and a\nsolid 3.2% over the year.  With hours\nworked rebounding, weekly earnings surged 0.7% and have risen 2.9% over the\nyear.    <\/em><\/strong><\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  I guess if\nyou forecast something long enough, it will eventually come true and that is\nthe case with the slowdown in job growth. \nI, and most of my colleagues, have been expecting the large job gains we\nsaw last year fade into the past. Well, we are adding workers at a slower pace that\nis more consistent with the expansion.  But\nit is clearly enough to keep the unemployment rate from rising.  Thus, while this is not a very good report,\nit is hardly a bad one, especially given the rebound in earnings.  Households still have the income to keep\nspending<\/em><\/strong> and I suspect their level of confidence, which has been shaken\nby the trade war, will likely either stabilize or slow its decline.  This report also has something for everyone\nat the Fed.  If you want to cut rates,\njust cite the more modest payroll rise. \nIf you want to keep rates stable, point to the strong gain in income. <\/em><\/strong> Indeed, that is the exact conundrum the Fed\nfaces.  The data have moderated and in\nsome cases softened, but they are hardly pointing to a recession.  Yet the Fed\u2019s fearless leader, Jay Powell,\nseems to be quaking in his wing tips. \nAnd the markets are screaming for a fifty basis point reduction.  The data do not support a half-point rate\ncut and the disagreements at the Fed are likely to restrain a move greater than\na quarter point. <\/em><\/strong> Still, Chair\nPowell may claim to be data driven but he is flying by the seat of his pants\nand that may be on fire.  So don\u2019t rule\nanything out except maybe no move.  The\nlow number of jobs added probably has taken that off the table for the\nSeptember 17-18 FOMC meeting.   <\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Jobs: 130,000; Private: 96,000; Revisions: -20,000; 3-month ave.: +156,000; Unemployment Rate: 3.7% (unchanged); Wages: +0.4% IN A NUTSHELL:  \u201cThe softening in job growth should surprise no one but it doesn\u2019t mean the economy is headed toward a recession right away.\u201d WHAT IT MEANS:  The job slump, if you want to call it that, … Continue reading August Employment Report<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1591","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1591"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1591\/revisions"}],"predecessor-version":[{"id":1592,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1591\/revisions\/1592"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}