September 07, 2018
The Labor Department released its monthly hiring and unemployment figures for August on Friday morning, providing one of the better snapshots of the state of the American economy.

The Numbers
Jobs Report for August: What to Watch For
■ 201,000 jobs were added. Economists had expected a gain of about 190,000.
Jobs Report for August: What to Watch For
■ The unemployment rate remained at 3.9 percent.
Jobs Report for August: What to Watch For
■ Average hourly earnings rose by an impressive 0.4 percent after growing by 0.3 percent in July. The year-over-year gain was 2.9 percent, up from 2.7 percent.

The Takeaway
Political intrigue and anxieties over trade did little to dent a 95-month streak of job creation as employers once again fattened their payrolls, and wages kicked up.
“What’s worth noting is that even though there still remains a lot of headline noise around politics and protectionism, underneath that, the U.S. economy — and that includes labor markets — is doing quite fine,” said Michael Gapen, chief United States economist at Barclays.
“It’s only one month,” he said of the 0.4 percent wage growth, “but it would be consistent with a gradual tightening in the labor market.”
The manufacturing sector, however, which President Trump has made a centerpiece of his job-creation efforts, registered fewer gains than initially estimated. The combined 93,000 jobs that the government originally reported for May, June and July was revised down to 62,000. And in August, the sector shed 3,000 jobs. Most of those losses were in trade-affected industries like automobiles and transportation equipment.
“You could tell the story that protectionism is taking some toll here,” Mr. Gapen said. “In most of the manufacturing indices, all showed a drop-off in new export orders.”
Other analysts warned against drawing too many conclusions from the latest data. “Manufacturing employment creation was still pretty good,” Carl Tannenbaum, chief economist at Northern Trust, said. “The impact of the tariffs that are in place now are annoying but modest in size and limited in scope, though the risk is certainly there if tariffs broaden, we could see business activity impaired much more significantly.”
Overall job growth for June and July was revised down by 50,000 jobs, bringing the three-month average gain to 185,000.
The unemployment rate remained at 3.9 percent, and the labor participation rate dropped to 62.7 percent, from 62.9 percent in July. Another measure of the labor market’s tightness, though, is the rate of underemployment — part-time workers who would prefer to work full time but have not been able to find a job. A broader measure of joblessness, which also includes discouraged workers, fell to 7.4 percent last month, reaching levels last seen in the early 2000s.
Over the year, the Labor Department said, 830,000 part-time workers have moved to full-time jobs.

Finally, a wage increase
The 0.4 percent monthly increase in average hourly earnings relieved some of the anxiety about sluggish wages.
“Four-tenths is a lot,” Mr. Gapen said. “I don’t think that’s the new trend, but we do expect wage growth to move in the 3 to 3.5 percent range next year.”
Amy Glaser, a senior vice president at the staffing company Adecco, said she had recently noticed a significant change in employers’ willingness to increase hourly wages. “Now clients are talking in terms of dollars instead of cents for wage increases,” she said.
During the busy holiday season, employees often jump from one employer to another for an additional 50 cents an hour, Ms. Glaser said. Companies are trying to head off that exodus, she said, by starting seasonal hiring earlier — in August instead of September and October — and by offering higher starting salaries.
In Louisville, Ky., where there are many distribution centers, jobs that have paid $12 to $13 an hour are reaching the $15-an-hour range, she said.
“The race for talent is just so tight, employers are trying to get any step ahead of their competition,” Ms. Glaser said.
The Trump administration, looking to counter concerns about the slow wage growth that has plagued the economy, released a report on Wednesday that highlighted shortcomings in official government data. The report, by the White House Council of Economic Advisers, showed a significantly higher pace of increases by taking account of aging workers, different inflation measures, tax cuts and benefits like parental leave and one-time bonuses.
Since the recession, employers have increasingly sought to attract workers with lures other than bigger paychecks, which increase fixed costs. More companies are seeking to offer traditional and nontraditional benefits — from unlimited time off and free popcorn to pension plans — instead of wage increases, said Becky Frankiewicz, North America president of ManpowerGroup.
Other employers say they are looking to develop their future work force.
Entry-level certified nursing assistants at Blue Ridge HealthCare in North Carolina, for example, earn $9 to $9.50 an hour.
The company has focused on training and incentives, said Cindy Cross, the system manager of recruitment and retention.
“There are individuals who really want to go back to school, can’t pay for it,” she said, so the company covers tuition and books, and then guarantees them a job after they graduate. If staff members want further training to move up the career ladder, Blue Ridge will pay for that as well, Ms. Cross said.
Customer call centers in the retail and financial sectors are also devoting more money to training, said Ms. Glaser. The prevalence of texting and social-media slang means that many service agents — who typically earn $12 to $17 an hour, depending on the area and job — lack the required typing skills and professional telephone style.
When getting a receptionist job is harder than getting into Harvard
The biggest payroll gains were in business and professional services and health care.
The job market, though, can vary radically depending on what people do and where they live.
Online listings can offer a glimpse of the mismatch between what employers are offering and what workers are seeking.
“In some occupations — typically those with low-skill requirements and relatively pleasant working conditions — there is a huge oversupply of candidates,” said Julia Pollak, a labor economist at the online employment market site ZipRecruiter.
Over the past year, for example, roughly 68,500 ZipRecruiter postings for administrative assistants attracted more than 8.1 million applications, or 118 responses on average for every job; 136,000 warehouse job listings drew nearly 9.3 million applicants, or 68 responses per job.
Geography, certainly, is critical. Lower-wage workers rarely move for a job. Still, on average, Ms. Pollak said in an email, “It is harder (in some sense, at least) to get a job as an administrative assistant, receptionist or warehouse worker than it is to get into Harvard, with its relatively generous 5.2 percent acceptance rate” in 2017.
There are severe labor shortages for jobs demanding specialized skills, licensing requirements, or tough working conditions. For the roughly 246,000 truck-driver listings on the site, there were 12 responses for each job, Ms. Pollak said. For the 237,000 skilled nursing jobs, there were just nine responses on average.
Unionized jobs, with higher pay, steady hours and better benefits — such as airport baggage handler positions — are by far the most coveted, she said.
“Pleasant workplace conditions are just like any other benefit, and people gravitate towards it,” said Andrew Chamberlain, chief economist at the career site Glassdoor. “And it enables employers to get all the people they want without raising wages.”
Mr. Chamberlain said minimum-wage increases in several states had done a lot to improve pay for some low-wage earners, like baristas, cashiers and bank tellers.
Changing jobs can amplify a wage increase. “There is a gap opening up between job-stayers and job-switchers,” he said, with switchers getting pay gains nearly a percentage point greater over the past 12 months, according to the Federal Reserve Bank of Atlanta’s wage tracker. In July 2014, the gap was just 0.6 percentage point.
Overall, Mr. Chamberlain added, “This is the strongest labor market in a generation of workers.”
The quirks of August
The Labor Department’s report provides only a partial and temporary barometer of the economy. The August estimates will be revised twice in the coming months.
August is a particularly quirky month. It had more working days (23) this year than July or September. For salaried workers, the same steady pay over a greater number of working days will register as a lower hourly wage.
August has also proved tough to measure accurately in recent years, at least initially. Over the past five years, every first estimate of job growth in August was subsequently revised upward — by 38,000 jobs on average, according to High Frequency Economics.
The report released on Friday was unlikely to knock the Federal Reserve off the course it has set to lift benchmark interest rates from the unusually low levels they have been at since the recession. The central bank is expected to raise the rate when Fed policymakers meet later this month.
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