In addition, the Bureau of Labor Statistics says overall wages are going up, and previous months added more jobs than first thought, meaning we have 217,000 more jobs than previous estimates showed.
In August, average hourly earnings for all employeeson private nonfarm payrolls rose by 8 cents to $25.09, following a 6-cent gain in July. Hourly earnings have risen by 2.2 percent over the year. Average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $21.07 in August. (See tables B-3 and B-8.)But in reality, the August jobs report was a mixed bag. Yes, the June and July revisions are very nice to see, as is the lower unemployment rate, but August only gained 173,000, and only 140,000 were added in the private sector (both are the lowest since March), and a big reason government employment was “up” by 33,000 was because the local public education area added 22,900 on a seasonally-adjusted basis. Given that many states had school starting in the middle of August (unlike Wisconsin, it seems like many states are starting earlier these days), this could be a seasonal blip, and we could see a seasonally-adjusted “cutback” in September that evens things out.
The change in total nonfarm payroll employment for June was revised from +231,000 to +245,000, and the change for July was revised from +215,000 to +245,000. With these revisions, employment gains in June and July combined were 44,000 more than previously reported. Over the past 3 months, job gains have averaged 221,000 per month.
A major red flag is manufacturing dropping by 17,000, which is the second-largest one-month drop in that sector since 2009. Yes, this mostly reflects a lack of seasonal hiring (non-seasonally-adjusted number was unchanged) with food manufacturing being a specific culprit (down 6,500 on a seasonally-adjusted basis, but up 6,600 on a non-seasonally adjusted one), but other stats also point to a manufacturing slowdown. Year-over-year job growth in the sector is at its lowest level in 18 months, average weekly wages are up barely more than 1.0% in the last year. Combine that with the slowdown in Asia’s economy and the dollar staying relatively strong, and you have to wonder if manufacturing will continue to lag in the coming months.
Mining and logging continues to suffer as oil prices stay low, with 10,000 more jobs lost in that sector in August, and 80,000 lost in the last 12 months (8.9% of the total jobs in that area!). Also, average hourly wages in that sector are down by 1.7%, and weekly wages in that sector are down by 6.4%, so even those who are still on the job are seeing their hours and wages cut. Keep an eye on what that does to budgets and economies of oil states like Alaska, Texas, Oklahoma, Louisiana and North Dakota, as all of those states have been lagging employment voice in recent months, with many relying on oil revenues to balance their state budgets.
Other areas of the economy grew very well. Health care continues to be a field of need, with over 40,000 jobs added in August, and 457,000 added in the last 12 months. And consumer spending seems to be doing OK, as the “Accommodation and Food Service” sector added more than 25,000 workers, and is up by more than 380,000 in the last year. In addition, the retail sector added more than 11,000 workers, and is up by more than 330,000 since August 2014.
To sum it up, while it's clear the Obama Recovery continued in August, I’m starting to see a few warning lights that things may be slowing down a bit. I’ll be interested to see if the Fed sees things that way as well, and delays raising interest rates at its meeting this month (which Wall Streeters would prefer, as it keeps the
I also am curious to see what effects this may have on Wisconsin's budget outlook, as the Legislative Fiscal Bureau's January projections were based on 3.1% GDP growth for 2015, and given that the U.S. had only around a 2.3% annual rate for the first half of 2015, I'm wondering how things will speed up to reach that mark in the second half.