The 2020 Mid-Year Economic Update_long

U.S. Employment Growth Slows in August, Indicators Still Positive

Unemployment rate was little changed at 6.1 percent in August.

Total nonfarm payroll employment increased by 142,000 in August, and the unemployment rate was little changed at 6.1 percent, the U.S. Bureau of Labor Statistics reported. Manufacturing employment was unchanged in August, following an increase of 28,000 in July.

Motor vehicles and parts lost 5,000 jobs in August, after adding 13,000 jobs in July. Auto manufacturers laid off fewer workers than usual for factory retooling in July, and fewer workers than usual were recalled in August. Elsewhere in manufacturing, there were job gains in August in computer and peripheral equipment (+3,000) and in nonmetallic mineral products (+3,000), and job losses in electronic instruments (-2,000).

Employment in mining and logging, wholesale trade, transportation and warehousing, information, financial activities and government also showed little change over the month.

Construction employment continued to trend up in August (+20,000). This is in line with its average monthly job gain of 18,000 over the prior 12 months. In August, employment trended up in specialty trade contractors (+12,000) and construction of buildings (+7,000).

The downward move is most likely a one off, according to The Conference Board. Some leading indicators, such as part-time employment for economic reasons, dropped. Also, unemployment continued its downward path, closing in on the 5.5 percent natural unemployment rate the business insight group has forecast for 2015. “If that is the case,” the company says in a press release, “it could still mean tightening of the labor market, leading to upward pressure on wages later in 2015.”

Average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents in August to $24.53. Over the year, average hourly earnings have risen by 2.1 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $20.68.

Over the year, the unemployment rate and the number of unemployed persons were down by 1.1 percentage points and 1.7 million, respectively.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 192,000 to 3 million in August. These individuals accounted for 31.2 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.3 million.

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