Job Creation Stumbles as August Adds Just 156000 Positions

Saturday, 02 Sep, 2017

U.S. job growth slowed in August as employers added 156,000 jobs, according to official data, but even that decreased pace suggests that businesses remain confident in an economy now in its ninth year of recovery from the global financial crisis.

Meanwhile, employment gains for June was revised down to 210,000 from 231,000 previously reported, and job gains in July was revised lower to 189,000 from 209,000. Temporary help employment was up 4.3% y/y, with monthly job gains averaging approximately 10,500 over the past 12 months.

The preceding three-month average of jobs added is 184,000, which puts the August number about 15 percent down by comparison.

The report showed that the nation's private sector gained 165,000 jobs in August.

Employment in the fields of construction, professional and trade services, mining and health care each rose in August, continuing a five-month trend.

Workers saw their average hourly earnings increase by 3 cents, which tracks with the 2.5 percent rate of earnings growth that has prevailed all year. Nor does the report change the view of what Janet Yellen's bunch is expected to do next (i.e. begin reducing the Fed's balance sheet at this month's meeting and then continue returning rates toward "normal" levels later in the year).

"With the survey evidence still strong and third-quarter economic growth on course for another decent gain after the second, there is no reason to believe that the modest drop-off in employment growth is the start of a more serious downturn", said Paul Ashworth, chief USA economist at Capital Economics.

Economists had expected the United States to add about 180,000 jobs over the month.

At first glance, temporary agency employment was soft for the month as well with growth of only 100 jobs. Retailers hired just 800 workers.

Some economists say a stable participation rate is a positive sign for the economy in recent years, since retirements mean it should in theory be falling slightly.

The US economy grew at an annualised pace of 3 per cent in the second quarter, its fastest pace since the beginning of 2015. Employment growth has always been expected to slow, though, as slack in labour markets is absorbed. Average weekly hours were actually down, sufficiently so as to drive average weekly earnings down from last month's report.