Friday, September 6, 2019

Less job growth, but wages holding up...except for manufacturing

Got another US jobs report today. And it certainly continues a trend of lower job growth as 2019 drags on.
Total nonfarm payroll employment increased by 130,000 in August. Job growth has averaged 158,000 per month thus far this year, below the average monthly gain of 223,000 in 2018. In August, employment in federal government rose, largely reflecting the hiring of temporary workers for the 2020 Census. Private-sector employment was up by 96,000, with notable job gains in health care and financial activities and a job loss in mining...

The change in total nonfarm payroll employment for June was revised down by 15,000 from +193,000 to +178,000, and the change for July was revised down by 5,000 from +164,000 to +159,000. With these revisions, employment gains in June and July combined were 20,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 156,000 per month over the last 3 months.
Well that's not very good. In fact, it's the third time we've had less than 100,000 private sector jobs in a month since the start of the year, and there hasn't been a stretch like that over 8 months since the start of 2011.

And it continues a trend of declining 3-month job growth, which is at its lowest levels in 7 years.

We also know that even this weaker job growth is overstated, and will be revised down.

Now, it wasn't all bad news in this report. The household survey was a good one, showing increases of in the labor force and in the proportion of people being employed, which kept unemployment at a low 3.7%.
The labor force participation rate edged up to 63.2 percent in August but has shown little change, on net, thus far this year. The employment-population ratio, at 60.9 percent, also edged up over the month and is up by 0.6 percentage point over the year.
Wage growth also had a nice bump in August.
In August, average hourly earnings for all employees on private nonfarm payrolls rose by 11 cents to $28.11, following 9-cent gains in both June and July. Over the past 12 months, average hourly earnings have increased by 3.2 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 11 cents to $23.59.

The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.4 hours in August. In manufacturing, the average workweek increased by 0.2 hour to 40.6 hours, and overtime declined by 0.1 hour to 3.2 hours. The average workweek of private-sector production and nonsupervisory employees increased by 0.1 hour to 33.6 hours.
But even with the good wage figures, manufacturing fell short.

12-month growth in hourly wages
All jobs +3.23%
Manufacturing +2.66%

12-month growth in weekly wages
All jobs +2.93%
Manufacturing +1.65%

Also add in that manufacturing employment continues to flatline - only gaining 3,000 jobs in August and 19,000 total in the last 6 months measured. And Trump's beloved miners are doing even worse, as mining lost 5,600 jobs in August, 10,200 in the last 2 months and 11,700 since January.

So while the jobs report warrants a "meh" as a whole, there is notable weakness among the blue-collar occupations that Trump promised to bring back. Wonder if some of those guys who took a risk on "businessman" Trump are realizing they've been SUCKERED, which would sink any chance Trump might have of getting a second term?

Logically, the jobs report is indicative of an economy in slowing growth at the end of an expansion, but not one in recession at this time. However, I can't understand why the stock market bounced back this week, other than idiotic speculation about trade deals (that never seem to work out). And if the wage growth or consumer spending slows down in the coming months, there doesn't seem like much to make up the difference.

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