The national economy added 130,000 jobs in August, extending its growth streak to 107 months. The last time the economy lost jobs was in September 2010. The August numbers kept the unemployment rate at 3.7 percent, near a 50-year low, though job-creation for June and July was revised downward slightly, by 20,000. Still, job creation in the last three months totals nearly 500,000, pointing to continued resilience despite indications of weakness elsewhere in the economy, and in parts of the world. But hiring was less brisk.
Job growth has averaged 158,000 a month this year, below the average monthly gain of 223,000 in 2018. August’s employment gain was helped by the federal government’s hiring of 25,000 temporary census workers in preparation for the 2020 census, and 3,000 additional federal workers for other duties. Health care (24,000), financial activities (15,000) and professional and business services (37,000) were other big-gain sectors.
Hourly earnings were also up a healthy 11 cents in August, to $28.11, with 9-cent gains in June and July, pushing hourly earnings up 3.2 percent in the past 12 months, enough to outpace inflation and realize a net gain for wage earners. The labor force participation rate was up to 63.2 percent in August but that’s not a statistically significant change from where the rate has been since dropping from 67 percent before the 2001 recession and 66 percent before the Great Recession.
The smaller labor force participation rate is a reflection of the continuing retirement of boomers. Their replacements in the workforce are due less to the nation’s natural, native replenishment than to immigrants joining the workforce. According to the Bureau of Labor Statistics, immigrants have a lower unemployment rate than naive-born Americans: in 2018, they registered an unemployment rate of 3.5 percent, compared to 4 percent for native-born Americans. There were 28,2 million immigrants in the labor force in 2018, making up 17.4 percent of the total (up from 17.1 a year earlier), with Hispanics making up nearly half the total and Asians another quarter. The labor force participation rate among immigrants was 65.7 percent. Some 96 million Americans are not in the labor force.
The employment-population ratio, at 60.9 percent, was up over the month, and up by 0.6 percentage point over the year.
There are hints of concern. The number of workers employed part time for economic reasons–those who could not find full-time work or whose hours were cut back against their will–increased by 397,000, to 4.4 million in August, after declining by as much a month earlier. The Labor Department’s u=6, or alternative, measure of employment and under-employment, which accounts for those part-time workers and for those who are either marginally attached to the labor force or who have become discouraged and dropped out, increase from 7 percent in July to 7.2 percent in August. It was 7.4 percent a year ago. Still, as of June, there were 7.3 million job openings, with layoffs and firings at 1.7 million.
Job sectors losing workers in August include retail (11,000) and mining (6,000). Others sectors saw little change. There are indications that the manufacturing sector is cooling. Business investment is down. The so-called yield curve is now inverted. That happens when short-term bonds are more lucrative than long-term bonds, by the interest rate charged, pointing to investors stockpiling money into safer, longer-term investments because they’re worried about the near term. Every time the yield curve has inverted since 1955, a recession has followed.