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U.S. August non farm payrolls were higher at 201,000 then the expected 191,000. Wages rose at their fastest year-on-year pace since the Global Financial Crisis. We are still digesting the effect trade wars will have on jobs with tensions affecting employers.


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The market expected the August employment report released this Friday to see nonfarm payrolls rise in line with longer-run trends in monthly employment growth at a consensus of 191,000 new jobs. Logic suggested a return to the mean after the volatility in the hiring data, with strong February hiring offset by weakness in March, April and July also disappointing. The wages data makes it more certain the FOMC plan to raise two more times into 2019. Unemployment remained at a 18 year low on lower participation and the two month NFP revision was 50,000 less jobs.

August U.S. Employment Report


US Jobs Aug 2018Employment:

  • June non-farm payrolls +201K vs +191K expected, Prior 157K (revised to 147K)
  • Unemployment rate 3.9% vs 3.8% expected
  • Participation rate 62.7% vs 62.9% prior
  • Underemployment rate 7.5% vs 7.5% prior
  • Two month net revision -50K
  • Private payrolls +204K vs 194K expected Prior 170K (revised lower to 153k)

Wages:

  • Average hourly earnings +2.9% y/y vs 2.7% exp, Prior  2.7% y/y
  • Average hourly earnings +0.4% m/m vs +0.2% m/m exp
  • Hours worked 34.5 vs 34.5 expected Prior hours worked 34.5 

 

US Jobs Aug 2018 Earnings by Industry

Household Survey Data

The unemployment rate remained at 3.9 percent in August, and the number of unemployed persons, at 6.2 million, changed little.

Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.6 percent), teenagers (12.8 percent), Whites (3.4 percent), Blacks (6.3 percent), Asians (3.0 percent), and Hispanics (4.7 percent) showed little or no change in August.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed in August at 1.3 million and accounted for 21.5 percent of the unemployed. Over the year, the number of long-term unemployed has declined by 403,000.

Both the labor force participation rate, at 62.7 percent, and the employment-population ratio, at 60.3 percent, declined by 0.2 percentage point in August.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 4.4 million, changed little over the month but was down by 830,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

In August, 1.4 million persons were marginally attached to the labor force, little different from a year earlier. (Data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. 

The unemployment rate remained at 3.9 percent in August, and the number of unemployed persons, at 6.2 million, changed little. 

Among the marginally attached, there were 434,000 discouraged workers in August, essentially unchanged from a year earlier. (Data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.0 million persons marginally attached to the labor force in August had not searched for work for reasons such as school attendance or family responsibilities. 

US Jobs Aug 2018. Industry

Establishment Survey Data

Total nonfarm payroll employment increased by 201,000 in August, in line with the average monthly gain of 196,000 over the prior 12 months. Over the month, employment increased in professional and business services, health care, wholesale trade, transportation and warehousing, and mining.

Professional and business services added 53,000 jobs in August and 519,000 jobs over the year.

In August, health care employment rose by 33,000, with job gains in ambulatory health care services (+21,000) and hospitals (+8,000). Health care has added 301,000 jobs over the year. Wholesale trade employment increased by 22,000 in August and by 99,000 over the year.

Durable goods wholesalers added 14,000 jobs over the month and accounted for about two-thirds of the over-theyear job gain in wholesale trade.

Employment in transportation and warehousing rose by 20,000 in August and by 173,000 over the past 12 months. Within the industry, couriers and messengers added 4,000 jobs in August.

Mining employment increased by 6,000 in August, after showing little change in July. Since a recent trough in October 2016, the industry has added 104,000 jobs, almost entirely in support activities for mining.

Employment in construction continued to trend up in August (+23,000) and has increased by 297,000 over the year. Manufacturing employment changed little in August (-3,000).  Over the year, employment in the industry was up by 254,000, with more than three-fourths of the gain in the durable goods component.

Employment showed little change over the month in other major industries, including retail trade, information, financial activities, leisure and hospitality, and government.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in August. In manufacturing, the workweek held steady at 41.0 hours, and overtime was unchanged at 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.8 hours for the fifth consecutive month.

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $27.16. Over the year, average hourly earnings have increased by 77 cents, or 2.9 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $22.73 in August.

The change in total nonfarm payroll employment for June was revised down from +248,000 to +208,000, and the change for July was revised down from +157,000 to +147,000. With these revisions, employment gains in June and July combined were 50,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 185,000 per month over the last 3 months.

The Employment Situation for September is scheduled to be released on Friday, October 5, 2018, at 8:30 a.m. (EDT).

Source: AFP, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

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