U.S. Jobs: Continued Slow and Steady Growth in August
The ongoing trend continues in the employment world: maddeningly slow and steady growth. Though August's jobs added count is a mostly-respectable 201,000, both June and July were revised downward. June's rather heftier 248,000 was trimmed to 208,000, while July's already scary-low 157,000 dropped another 10,000 to an even scarier 147,000.
That said, the average over the trailing 3-month period is 185,000, which is about 6,000 higher (3.5 percent) than the trailing 12-month average for jobs added of over 179,000. Though growth remains positive, it's slow. Unemployment is holding steady at 3.9 percent, which normally indicates that excess labor capacity is more or less used up, and employers need to start competing for employees, partly by paying more.
Wages are not exactly showing the kind of growth that economists expect, however, and that most people would like to see. Basic hourly wages were up by 10 percent in August for an average of $27.16, up by 2.9 percent over the past twelve months. Ironically, the current U.S. inflation rate for the 12-month period that ended in July 2018 is, you guessed it, 2.9 percent.
This means that workers continue to tread water. They're keeping up with inflation, but with no real improvement in their earnings outlook (or their paychecks). This has been going on for a decade now, where workers remain firmly stuck in neutral. It's hard to feel like one is getting ahead when, year after year, the status quo marches forward unchanged and unchanging.
Without more robust growth, however, and continued low unemployment, wages are unlikely to jump meaningfully. Why? Because the economy is still soaking up the great numbers of unemployed and underemployed persons left in the wake of the Great Recession of 2008-2009. Thus, even though unemployment is low, it remains a buyer's market for jobs, and employers can continue to hold off on wage increases in many sectors.
That explains the continued slow wage growth we keep experiencing despite a decade-long bull stock market (approaching a new all-time record) and numerous politicians and business people boasting about how great our economy is, and how robust its growth.
In fact, CompTIA's latest tech sector focused analysis bears out my basic points. Released earlier this morning, it's titled "U.S. Tech Sector Employment Momentum Stalls in August."
It shows IT hiring flat for that month, with a net loss of 100 jobs, with 3,900 jobs added, but 4,000 jobs lost. CompTIA Vice President Tim Herbert says that it is "difficult to pinpoint the exact cause of a downturn in any given month, the escalating disruption of international trade is certainly weighing on the minds of industry executives."
Indeed, recent political uncertainty and hoopla can't help but put a drag on global markets, which will inevitably slow employment in general, and IT opportunities in particular.
Growth areas in August included professional and business services (53,000 jobs added, against a 12-month trailing average of 43,000); health care employment (33,000 job added, against a 25,000 12-month trailing average), constructions (23,000 against a 25,000 12-month trailing average), transportation and warehousing (20,000, against 14,400 12-month trailing average).
There were lesser increases in wholesale trade and mining, and a slight decline in manufacturing (-3,000). Other major sectors, namely, retail trade, information, financial activities, leisure and hospitality, and government, showed little or no change.
Thus, though growth continues unhindered and relentlessly, it is slow enough to keep tangible benefits to workers out of easy reach. Alas, we're stuck in what appears to be the economic doldrums, with no immediate relief anywhere in sight. Stay tuned.