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U.S. Employment Takes a Half-Step Backward in August

July’s numbers showed an improving employment trend in the U.S. labor market. As we look back at August, alas, things are once again moving in not-desirable direction.

Slow growth snail arrowAfter looking at the August 2017 jobs report from the U.S. Bureau of Labor Statistics, all I can say is “Back to slow(er) growth mode!” Though most of the major indices are little changed or unchanged, monthly figures for August come in at 156,000 down by 17 percent from the previous month’s revised 189,000 number (reported in early August at 209,000).


The preceding three-month average of jobs added is 184,000, which puts the August number about 15 percent down by comparison. June was also revised downward from 231,000 to 210,000 jobs, so things trended downward for the quarter as well, in retrospect.


What does this portend? It indicates that while growth is still ongoing, it’s at a fairly slow pace. What we’re experiencing right now represents job growth that barely suffices to absorb new entrants to the U.S. labor market (recent graduates and other young people entering the work force for the first time).


But we really need to see numbers above 200,000 to pick up the slack that still remains in the labor force in the wake of the Great Recession of 2008-2009, now almost a decade behind us on the time line. Thus, we’re in the odd situation of enjoying low unemployment — 4.4 percent is the official figure for August 2017 — while wages remain pretty flat.


The average hourly wage increased by $0.03 for August, up to $26.39, but is up only $0.65 for the past 12 months for a 2.5 percent increase overall. Thus, we’re beating inflation, but only just barely. (It’s reported at 1.7 percent for the 12-month period from August 2016 through July 2017, the most recent number available).


Like I said before, this is “slow growth mode” indeed!