Job growth slows in August

The U.S. economy added 235,000 jobs in August, the U.S. Bureau of Labor Statistics reported this morning.

The unemployment rate dipped 0.2% to 5.2%. But the latest report is well below expectations and projects of as many as 600,000-plus new jobs being added.

The labor force participation rate, at 61.7% in August, was unchanged from the previous month. 

The change in employment for June was revised up by 24,000, from an increase of 938,000 to an increase of 962,000, and the change for July was revised up by 110,000, from an increase of 943,000 to 1.053 million.

Employment in retail declined by 29,000 in August, with losses in food and beverage stores (-23,000) and in building material and garden supply stores (-13,000). Retail trade employment is down by 285,000 since February 2020.

Construction employment declined by 3,000 jobs.

Associated Builders and Contractors (ABC), reports that nonresidential construction employment declined by 20,300 positions on net. Nonresidential specialty trade contractors lost 9,200 jobs and heavy and civil engineering lost 8,300. Nonresidential building employment dipped by 2,800 positions.

The construction unemployment rate fell by 4.6% in August

“From the cyclical low point during the total lockdown in April 2020, 17 million jobs have been recovered," said Lawrence Yun, chief economist of the National Association of Realtors. "Still, another 5 million needed to just reach back to the prior peak right before the pandemic."

Yun also notes that while wages have been rising by 4.8% over the year, consumer price inflation of 5.2% is "eating away at those wage gains."

Manufacturing added 37,000 jobs in August, with gains in motor vehicles and parts (+24,000) and fabricated metal products (+7,000). Employment in manufacturing is down by 378,000 from its pre-pandemic level in February 2020.

Transportation and warehousing added 53,000 jobs in August, bringing employment in the industry slightly above (+22,000) its pre-pandemic level in February 2020.

Employment in leisure and hospitality was unchanged after increasing by an average of 350,000 per month over the prior 6 months.

Average hourly earnings for all employees on private nonfarm payrolls rose by 17 cents to $30.73 in August, following increases in the prior four months. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.99.

In August, the average workweek for all employees on private nonfarm payrolls was 34.7 hours for the third consecutive month. In manufacturing, the average workweek fell by 0.2 hours over the month to 40.3 hours, and overtime remained at 3.2 hours.

Click here to read the full Employment Situation Report from the Bureau of Labor Statistics.