–Earnings Dip, Hrs Gain; Unemploy Dip Reflects Lower Partic, Labr Force
By Joseph Plocek
WASHINGTON (MNI) – The U.S. August employment report was nothing to
crow about, giving mixed signals about the economy.
August payrolls printed a lower-than-expected +96,000 but the
unemployment rate fell 0.2 point to 8.1% (8.1115% unrounded). Earnings
fell and hours rose, with mixed implications for incomes and production.
The decline in unemployment stemmed from a 368,000 contraction in
the labor force and a 0.2 point drop in participation in the workforce
to 63.5%. We urge caution interpreting this in the event education
workers somehow took lump-sum payments and then declared themselves
unemployed. Certainly the small growth in payrolls is not consistent
with an ever-declining unemployment rate.
Average Hourly Earnings fell one cent to +1% over the year (for
private workers) and hours rose.
The June-July payrolls revision totaled -41,000 on net, not a sign
of strength. And many of the August jobs gains were not in ‘strong’
industries – centering in restaurant and home healthcare workers.
The August payroll composition included: manufacturing -15,000
(auto -7,500, on fewer recalls after fewer layoffs than usual),
construction +1,000, retail +6,100, temporary workers -4,900,
healthcare +21,700, government -7,000 (state & local continued its
drop and Federal printed +3,000), finance +7,000, restaurants +28,300,
and utilities +8,800 as a strike settled.
Bottom line: not a bad report but certainly no ball of fire that
will alter the Fed’s thinking. The U.S. economy needs to generate two or
three times this many jobs each month to climb out of its malaise.
Details: Payrolls/Prior Pv AHE,yoy Agg Hrs Civ Unempl Rt/Unrnd
Aug +96k —- +1.012% 103.6 8.1% (8.1115%)
Jul +141k +163k —– 103.5 8.3% (8.2535%)
Jun +45k +64k —– 103.4 8.2% (8.2165%)
** MNI Washington Bureau: (202) 371-2121 **
[TOPICS: M$U$$$,MAUDS$,MT$$$$,MAUDR$]
