Job Growth Slowed in August, With U.S. Adding 156,000 Positions

The Labor Department on Friday released the August figures on hiring and unemployment. This is the latest official snapshot of the state of the American economy.

The Numbers

• 156,000 jobs were added in August, a bit less than what economists had been expecting.

• The unemployment rate rose slightly to 4.4 percent. July’s jobless rate was 4.3 percent.

• Job gains for June and July were revised downward by 41,000.

The Takeaway

With monthly hiring near or above 200,000 in April, June and July, economists had been expecting to see a falloff last month. August has historically been soft for job creation, with the data coming in below expectations in four of the last five years.

The numbers for August suggest that the economy remains on track. There have been other encouraging signs lately, including a better-than-expected report Wednesday on economic activity in the second quarter and gains on Wall Street this week. Stocks were up, if only slightly, in early trading on Friday.

“For the economy, it’s steady as she goes, but for the markets it’s Goldilocks,” said Torsten Slok, chief international economist at Deutsche Bank, referring to the not-too-hot, not-too-cold August payroll increase.

Despite the steady hiring, however, wage growth remains anemic. Average hourly earnings rose just 0.1 percent last month, less than expected. The 12-month gain is now 2.5 percent. The failure of salaries to rise amid robust hiring and falling unemployment in the past few years is something of an economic mystery. The data for August will probably intensify that question.

The Background

Unemployment is near its lowest rate in 16 years, and hiring continues, but many workers remain on the sidelines. The so-called participation rate in August was unchanged at 62.9 percent.

Like economists and traders, the Federal Reserve is looking for signs that millions of workers who were sidelined during the recession and the initial years of the recovery are returning into the job market.

Policy makers at the central bank are also keeping a close eye on wage growth. The Fed wants to head off any risk of inflation by gradually raising interest rates to prevent the economy from overheating.

“There’s no sign of inflation, which keeps the Federal Reserve on hold in terms of interest-rate hikes, and it suggests stocks should keep doing well,” Mr. Slok said.

Traders now assume a 30 percent chance of a rate increase when Fed policy makers meet in December, down from a 50 percent chance a few weeks ago. The Fed is set to meet later this month, but is not expected to raise rates.

A Success Story

Mack Truck employs about 1,800 people in the Pennsylvania’s Lehigh Valley as demand for new trucks has rebounded.CreditJessica Kourkounis for The New York Times

In the Lehigh Valley, where vanished giants like Bethlehem Steel once employed thousands of workers who turned hot metal into finished steel, Mack Truck is hiring.

The company has had a presence in the area since 1905, when the Mack brothers moved truck production to Allentown from Brooklyn, where the company was founded in 1900. But employment at Mack — which is owned by Sweden’s Volvo Group — fluctuates with truck sales.

The number of workers at its factory in Macungie, Pa., dropped from 1,875 at the end of 2015 to 1,287 a year later as demand for new trucks fell. But the market is looking stronger, and the factory now employs 1,800 people.

Mack’s story underscores the broader rebound in the manufacturing sector, which lost more than two million jobs in the last recession, but has partly clawed back its way back since then. Factories added 101,000 workers to their payrolls in the first seven months of 2017, with another 36,000 in August.

This article has been republished from www.nytimes.com

Last modified onFriday, 01 September 2017 14:45

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