It's Jobs Friday in America, and here's the rundown.
The Bureau of Labor Statistics reported that U.S. unemployment declined by two-tenths of a percentage point to 8.1% and non-farm payrolls grew by just under 100,000 jobs in August. The unemployment rate fell as a result of more than 368,000 people dropping out of the labor force last month.
With so many workers dropping out of the labor force and growth in payrolls falling below the average for the year (145,000 through July), the August report is a clear disappointment. There is no reason to believe the economy has slowed, but the pace of job growth is barely sufficient to accommodate growth in the working-age population. Over the month, manufacturing job growth was negative (largely due to seasonal factors), health care job growth was weak and public-sector payrolls continued to decline.
Now for a quick review of what other labor economists found in today's report:
- Dean Baker, Center for Economic and Policy Research — Jobs Byte:
The restaurant sector continued to show robust job growth, adding 28,300 jobs. This unusually strong growth can be used to clear up some confusion in news accounts about the nature of the jobs being created in the recovery. A disproportionate share of new jobs have been in low-paying sectors. This should be expected. The quality of jobs is in part a function of the quantity. When the unemployment rate is low, there are still bad jobs being created, but they just go unfilled.
This is well-illustrated by the share of new jobs in restaurants, which is among the lowest-paying sectors. In periods of high unemployment — like the early 90s, the early 00s and the present — restaurant jobs accounted for a large share of employment growth. By comparison, they accounted for a relatively small share of new jobs when the unemployment rate was lower. If the unemployment rate was again near 5 percent, there is no reason not to believe that the mix of jobs would also improve.
- Heidi Shierholz, Economic Policy Institute — The public sector has cut 680,000 jobs over the last four years:
While overall the labor market has added jobs for the last two-and-a-half years, it’s actually just the private sector that’s adding jobs; the public sector is losing them. In August, the public sector lost 7,000 jobs. Since the peak of public-sector employment four years ago in August 2008, the public sector has shed 680,000 jobs. Through ripple effects, the loss of public-sector jobs also causes job loss in the private sector, amplifying the drain on the recovery.
- Jared Bernstein, On The Economy — Jobs Report, First Impressions & Is This Part of What’s Going On?:
Over the past five months, when job growth has been slower, average monthly gains were 87,000; over the prior five months, they were 211,000, a notable deceleration. In fact, the more recent pace is consistent with trend, or slightly below trend, growth in GDP we’ve seen in recent quarters. Absent greater demand for the goods and services employers produce, we are unlikely to see much stronger job growth in coming months.