August jobs report - not booming anymore, but still growing in a healthy way

Just in time for Labor Day, we got another look at the US jobs market on Friday. And the topline numbers for August seem pretty good.

Payrolls grew by +187k in August, exactly matching growth in July. This is a number that's also pretty darn close to consensus.

Revisions for the past two months are strongly negative: July down -30k to +157k, and June down 80k to +105k.

Unemployment rose 0.3%-pts to 3.8%.

— Justin Wolfers (@JustinWolfers) September 1, 2023

The household survey also shows employment growth, as it rose +222k.

The unemployment rate (for this month) rose because people are returning to the labor force, and the participation rate rose to a high for this cycle of 62.8%, edging nearer to its pre-pandemic high of 63.3%.

— Justin Wolfers (@JustinWolfers) September 1, 2023

The labor market is still strong...but clearly cooling.

August job growth: +187,000
Past 3 months average: +150,000
Past year average: +271,000

**This is another sign of a "return to normal" ** pic.twitter.com/sMmFzVgJyb

— Heather Long (@byHeatherLong) September 1, 2023

And if anything, the August job gains were deceptively low, because it included a loss of more than 36,000 trucking jobs, mostly related to Yellow Truck's bankruptcy filing at the end of July. And there was a "loss" of 16,800 jobs in the "motion picture and sound recording industries" sector, related to the ongoing SAG writer's and actors' strike.

But given that a lot of GOP hack/burner accounts were talking about "June revised down by 80,000", there were clearly orders sent out. But it was a big number, and marked the first time that (seasonally-adjusted) increases in private sector jobs were below 100,000 in a month for the first time since Biden became president. So I wanted to see what happened.

The 80,000 in downward revisions for June were concentrated in 3 main areas - government (revised down by 38,000), temporary help services (revised down 15,800), and transportation and warehousing (revised down 10,400). The government part is likely related to a miss on when school workers stopped working in June (which ended up reducing a big "gain" for that month), and temp help and transportation/warehousing have been hurting in recent months, and are areas that may be subject to high revisions for earlier in 2023 as well.

Most other sectors didn't change all that much, and some were even revised up, such as Health Care/Social Assistance (revised up by 12,800). The health care sector in particular has had major growth since the end of 2021, with 981,000 jobs added in that time, and health care is adding an average of more than 50,000 jobs a month for 2023.

The rise in unemployment was for the "good reason" - 736,000 additional people joining the labor force, and 222,000 of them finding jobs. And 3.8% is still a very good number to have. At the same time, I would hope the Federal Reserve noticed the lower revisions and rate of job growth during recent months, and the 0.24% increase in average hourly wages is a "Goldilocks" scenario of a 3% annual increase that beats recent levels of inflation, but also wouldn't ignite higher costs for businesses. Isn't that what the Fed said they wanted out of their rate hikes?

Basically, it looks like a full-capacity jobs market to me, with moderate job increases and decent wage growth. Good to spot to be in as the kids get back to school, and combined with strong consumer spending figures for July, it looks like Q3 of 2023 is going to keep in the right direction in the near future.