U.S. Employment Performance August 2019

The U.S. added 130,000 net new jobs in August 2019 on a seasonally adjusted basis (preliminary) averaging 172,800 new jobs monthly in the prior 12-months and 158,000 per month year-to-date.   The unemployment rate remained unchanged at 3.7 percent – hovering near a five-decade low.

Total U.S. employment is shown in the graph.

The unemployment rate varies significantly by level of education attainment, with each level having improved from a year ago.  The following table shows the unemployment rates for August 2019 and 2018 by education.  Overall, other than a few months this year, the unemployment rate is the lowest in 50 years.

Employment in the Leisure & Hospitality sector (in my opinion) has been an excellent proxy of the overall health index of the U.S. economy.  People do not spend money on vacations, cruises, entertainment, spas or dinners out unless they feel good about the future economy.  My premise is that the U.S. economic outlook is healthy as long as the employment growth rate in Leisure and Hospitality matches or exceeds that of the country overall.  Current Leisure & Hospitality job growth in the prior 12 months was 1.9 percent versus 1.4 percent for the total economy.  I still see no recession on the horizon at this time foregoing unanticipated economic shocks given robust growth in in the Leisure & Hospitality Sector.  That said, the U.S. is in new record territory with the longest economic expansion in history and there will be another recession. The indicators, however, say just not now.  While the economy is slowing, it remains positive in growth.  Total employment in the Leisure & Hospitality sector is shown in the following graph.  

 

 

Other items in the August 2019 jobs report:

  • Number of Persons Unemployed for Less Than 5 Weeks rose by 6,000 from a month ago, and is now at 2.207 million versus 2.199 million a year ago (up 8,000)
  • Long-Term Unemployed (jobless for 27 or more weeks) increased by 77,000 versus the prior month and is now at 1.243 million versus 1.320 million a year ago
  • Civilian Labor Force Participation Rate is 63.2 percent is up from 62.7 percent a year ago
  • Unemployment The number of unemployed people dropped from 6.197 million in August 2018 to 6.044 million this August – a decline of 153,000
  • Employment-Population Ratio is now 60.9 percent versus 60.3 percent a year ago – the bigger the better
  • Number of Persons Employed Part Time for Economic Reasons(also known as involuntary part-time workers) are individuals desiring full-time employment but either had their hours cut back or cannot find a full-time job), increased by 397,000 from the prior month and is up to 4.381 million compared to 4.368  million a year ago
  • Marginally Attached to the Labor Force (not currently counted in the labor force, want and are available for work and had looked for a job in the prior 12 months) now at 1.564 million was at 1.443 million a year ago.  Within that group, 467,000 were classified as Discouraged Workers – persons not currently looking for work because they believe there are no jobs available for them, up from 434,000 a year ago

The next table shows the job change (in thousands) for Employment Supersectors.    Manufacturing, for example, added 133,000 net new jobs in the past 12-months (638,000 in the prior 60 months) and made up 8.5 percent of all jobs as of August 2019.  Although the Mining & Logging Supersector (which includes oil and gas) posted a 0.7 percent increase in the past 12-months, the category made up just 0.5 percent of all U.S. jobs.  Top-growing sectors in the past 12-months included Education & Health Services up 2.5 percent, Construction up 2.2 percent and Professional & Business Services up 2.1 percent.  None of the sectors posted jobs losses for the past 12-month period.  Mining & Logging, however, did drop 151,000 total jobs in the past five years.

To read the entire latest news release on U.S. employment click https://www.bls.gov/news.release/pdf/empsit.pdf

The job growth rate continues to be constrained by the lack of available workers.  Though growth is slowing it remains positive.  I again reiterate my expectation for an ongoing increase in the hourly wage rate given the lack of skilled workers to fill available positions.

Ted

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