The Jury Talks Back

9/6/2019

Jobs Numbers Kind of Weak

Filed under: Uncategorized — Patterico @ 7:50 am

Tiana Lowe at the Washington Examiner:

On [its] face, the August jobs report from the Bureau of Labor Statistics doesn’t look too bad for the economy. The economy added 130,000 jobs, missing the 150,000 mark expected by economists. Unemployment is steady at an excellent 3.7%. But buried in the numbers are key details that indicate a fragile economy.

For one thing, 25,000 of those 130,000 jobs are temporary ones created by the government for the sole purpose of the 2020 census. For another, the BLS revised downward the reported employment gains in the already mediocre June and July jobs reports by a cumulative 20,000 jobs. Still, the average jobs gains in the past three months are 156,000 per month, meaning that August constituted a slight but sure drop.

There’s some very good news below the surface, to be sure. The most important metric indicates that while industry may be spooked by President Trump’s trade war, we’re likely not on the cusp of a recession in earnest. The BLS found that annual wage growth has increased by 3.2%, beating expectations, and significantly, the hours worked by all employees and manufacturing workers alike marginally increased.

The New York Times echoes the message that the numbers are mixed:

Paul Ashworth, chief United States economist at Capital Economics, said the headline number in August was “flattered” by the big increase in census hiring. “But even allowing for that, there has been a clear slowdown in trend employment growth, with the three-month and six-month averages both at around 150,000 now, down from about 230,000 a year ago,” he said.

Despite the middling headline number, there were positive signs elsewhere in the report. The labor force participation rate rose to 63.2 percent, from 63 percent, suggesting that workers who had been on the sidelines are gradually being lured back into the labor market. Average hourly earnings increased by 0.4 percent, which is more than analysts had expected. And the length of the average workweek increased after falling in July.

Tariffs are not good. They can’t possibly help an economy. I’m glad there are no signs of recession at this point. We’ll see how long that remains true.

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