By: Mark Simenstad, Chief Investment Strategist, Thrivent Asset Management September 05, 2017
Job growth slowed slightly in August, but the economy still added 159,000 new jobs, according to the U.S. Department of Labor, Bureau of Labor Statistics Employment Situation report issued September 1. This marks the 83rd consecutive month of job growth. New jobs added in July was revised down from 209,000 to 189,000.
The unemployment rate inched back up from 4.3% to 4.4% in August, but still remains at a low level and is considered to be at or near full employment.
While recent surveys by the Philadelphia Federal Reserve have shown that businesses are interested in adding staff, finding qualified workers has become an obstacle to business growth – and may continue to be a problem in the months ahead. The addition of more than half a million new jobs the past three months is a positive sign for the economy because it indicates that businesses are motivated to add new workers despite the increasing difficulty of finding qualified applicants.
But while job growth has been good, wage growth was particularly weak in August. Wages grew a very disappointing 3 cents over the previous month – and are up 2.5% over the past 12 months. Average hourly earnings for all employees on private nonfarm payrolls were $26.39 in August, with year-over-year average hourly wage growth of 65 cents, or 2.5%. Wages remain below pre-recession levels.
Initial jobless claims have remained at an extremely low level, with 236,000 claims the week ending August 24, according to the Department of Labor Unemployment Insurance Weekly Claims report. Jobless claims have remained under 300,000 for 130 consecutive weeks – the longest stretch since 1970.
In all, 1.95 million Americans are receiving unemployment benefits. That is little changed from last month and remains at about the lowest level since the mid-1970s. This is even more impressive considering the difference in the size of the labor force.
Here are some of the other key trends highlighted in the report:
The number of long-term unemployed (those jobless for 27 weeks or more) edged up by 0.1 million to 1.8 million and accounted for 25.9% of the unemployed. Year-over-year, the number of long-term unemployed was down by 225,000, but still remains at an elevated level.
The number of persons employed part time for economic reasons, at 5.3 million, was unchanged.
The labor force participation rate was unchanged in August at 62.9%. The employment-population ratio was down 0.1% in August at 60.1%. Both figures are little changed over the course of this year.
The labor force participation rate for those in their prime working years (age 25-54) has remained steady at 81.6%, which is about 1.4% below the pre-recession level. That continues to be a weakness in the employment recovery.
The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.4 hours in August.
Continuing job growth this summer has been a good sign for the economy. With unemployment at about 4.4%, continuing job growth at the present pace may prove difficult as employers compete for qualified workers.
Media contact: Callie Briese, 612-844-7340; firstname.lastname@example.org
All information and representations herein are as of September 1, 2017, unless otherwise noted.
The views expressed are as of the date given, may change as market or other conditions change, and may differ from views expressed by other Thrivent Asset Management associates. Actual investment decisions made by Thrivent Asset Management will not necessarily reflect the views expressed. This information should not be considered investment advice or recommendations of any particular security, strategy or product.
Asset management services are provided by Thrivent Asset Management, LLC, a wholly owned subsidiary of Thrivent Financial, the marketing name for Thrivent Financial for Lutherans.
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