US nonfarm payroll employment rose by 142,000 in August, and the unemployment rate was little changed at 6.1% according to the US bureau of Labor Statistics Friday. Employment rose in professional and business services and in health care.
Incorporating the revisions for June and July, which reduced total nonfarm employment by 28,000 on net, monthly job gains have averaged 207,000 over the past 3 months. In the 12 months prior to August, employment growth averaged 212,000 per month.
Professional and business services added 47,000 jobs in August. Within this industry, employment in management of companies and enterprises increased by 8,000 over the month. Employment continued to trend up in administrative and support services (+23,000), architectural and engineering services (+3,000), and in management and technical consulting services (+3,000). Over the year, employment in professional and business services has expanded by 639,000.
Health care employment grew by 34,000 in August with job gains in offices of physicians (+8,000) and in hospitals (+7,000). Over the past 12 months, employment in health care has risen by 233,000.
Employment in food services and drinking places continued to trend up in August (+22,000) and is up by 289,000 over the year.
Construction employment also continued on an upward trend in August (+20,000). This is in line with its average monthly job gain of 18,000 over the prior 12 months.
Manufacturing employment was unchanged in August, following an increase of 28,000 in July. Employment in motor vehicles and parts manufacturing was down by 5,000 over the month after increasing by 13,000 in July. Firms in this industry laid off fewer workers than usual for factory retooling in July and recalled fewer workers than usual in August. This contributed to a seasonally adjusted increase in July and decrease in August. Employment growth in motor vehicles and parts manufacturing averaged 4,000 over the past 2 months, the same as its average monthly gain for the 12 months prior to July.
Retail trade employment was little changed in August (-8,000). Within retail, employment declined in food and beverage stores (-17,000); this industry was impacted by employment disruptions at a grocery store chain in New England. Elsewhere in retail, employment increased in auto dealerships (+5,000).
Employment in other major industries showed little change over the month.
Average hourly earnings of all employees on private nonfarm payrolls rose by 6 cents to $24.53 in August. Over the 12 months ending in August, average hourly earnings grew by 2.1%. From July 2013 to July 2014, the Consumer Price Index for All Urban Consumers (CPI-U) increased by 2.0%.
Turning to measures from the survey of households, the unemployment rate was little changed in August, at 6.1%, but is down by 1.1%age points over the year.
In August, there were 9.6m unemployed persons, little different from July. The number of long-term unemployed (those unemployed 27 weeks or more) declined by 192,000 over the month. The total number of unemployed has fallen by 1.7m over the year, with about three-fourths of this decline among the long-term unemployed.
The labour force participation rate, at 62.8%, was little changed in August and has been essentially unchanged since April.
In August, the employment-population ratio was 59.0% for the third consecutive month. Over the year, however, the employment-population ratio is up by 0.4%age point.
Among the employed, the number of people working part time for economic reasons was little changed at 7.3m in August. (These individuals, also referred to as involuntary part-time workers, would have preferred full-time employment, but had their hours cut or were unable to find full-time work.)
Among people who were neither working nor looking for work in August, 2.1m were classified as marginally attached to the labour force, down by 201,000 over the year. (These individuals had not looked for work in the 4 weeks prior to the survey but wanted a job, were available for work, and had looked for a job within the last 12 months.) The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 775,000 in August, little changed over the year.
In summary, nonfarm payroll employment rose by 142,000 in August, and the unemployment rate was little changed at 6.1%.
Elise Gould economist at the Economic Policy Institute commented: "While it’s yet to be seen whether this slower job growth is an anomaly or a new trend, these numbers should give us pause. Adding in this month’s disappointing numbers, job growth this year is still above last year’s average at this time. Job growth has averaged 215,000 jobs a month thus far in 2014, compared to 197,000 in the first eight months of 2013. We need to be consistently adding jobs at a much faster rate to return to the labor market conditions before the recession began—arguably a labor market that still had considerable slack."
Jim O’Sullivan, chief economist at High Frequency Economics, commented - - "In short, payrolls were weaker than expected, but there has been a tendency for the August data to be underreported initially and then revised up later. There is certainly no sign of the trend weakening in the latest jobless claims data — or growth indicators in general recently. Even with the weaker August reading, payrolls gains have averaged 215,000 per month so far this year, up from 194,000 last year. Gains in the household survey employment measure have averaged 223,000. That pace is more than strong enough to keep the unemployment rate coming down. In turn, we expect hourly earnings to start accelerating soon as unemployment continues to decline. That said, the earnings data have remained fairly stable so far."
"I don't believe this data. It's not consistent with anything," Mark Zandi, Moody's Analytics chief economist, said in a CNBC "Squawk Box" interview.
He produces the monthly ADP private sector jobs report, which on Thursday said jobs grew in August by 204,000.
Alan Krueger, former chairman of President Barack Obama's White House Council of Economic Advisers, said: "This is anomalous."
"But the dip in the unemployment rate, the 6.1%, is positive," he added.
Despite the payroll weakness, Krueger said he's thinks "the underlying trend is still 200,000 jobs of month."
Anthony Chan, chief economist at JPMorgan Chase, gives out his forecast ahead of the release of the August jobs report in the U.S. and says that the labor force participation still has a long way to go.