US Job Growth Slower But Still Strong in August

Posted September 02, 2017

The pace of US job growth slowed in August while the unemployment rate edged up, the Labor Department reported on Friday. The government also revised down its estimate of job growth in June and July by a combined 41,000, leaving an average monthly gain this year of a decent 176,000. Over the past 12 months, average hourly earnings have risen by 2.5 percent, the same growth as in July.

August's numbers fall slightly short of previous months, and came in below economists' predictions that the economy would add roughly 180,000 jobs.

One of the leading sources of job growth last month was manufacturing, which added 36,000.

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Employment in the fields of construction, professional and trade services, mining and health care each rose in August, continuing a five-month trend. Wage growth typically averages 3.5 percent to 4 percent annually when unemployment is this low.

However, job figures in August are prone to being revised upwards at a later date and most analysts expect the Federal Reserve to keep to its plan of raising interest rates for the third time this year in December.

Underemployment, which includes the unemployed, part-timers who would like more hours, and people who have stopped looking for work and are not counted as unemployed but say they would take a job if they could find a suitable one, is also falling fast. The unemployment rate for those with bachelor's degree held at steady at 2.4 percent, while unemployment among high-school graduates ticked up by 0.6 percent.

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Labor Department officials Friday made it clear that Harvey, which has pounded southeast Texas over the last week, had no effect on the jobs report because data were collected earlier in the month.

Private employment rose by 165,000 in the latest month, below the 173,000 forecast, and far below the 237,000 reported this week by payroll services firm ADP.

Black Americans' jobless rate rose from 7.4 percent to 7.7 percent as the number of unemployed climbed. August was the 83rd straight month of job gains. The wage growth number is higher than inflation, but right at the level at which it has been for years. Just a few years ago it was closer to 1.5 percent. Despite ostensibly tighter labour markets, wage growth has been stuck at 2.5% over the last 5 months, similar to the 2.6% average increase past year.

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