Economy adds 201K jobs in August, unemployment holds at 3.9 percent
The U.S. economy added 201,000 jobs in August, slightly above expectations, as the job market rebounded following a July slump.
The unemployment rate held steady at 3.9 percent, near an 18-year low, the Labor Department reported Friday.
{mosads}Estimates had been for about 190,000 jobs to be added in August.
There were 50,000 fewer jobs in June and July than initially reported.
After revisions, job gains have averaged 185,000 a month over the past three months, a sign of continued strength in the labor market.
The economy has added jobs for 95 straight months, beginning in October 2010 under former President Obama. It is the longest streak of monthly jobs growth on record.
Wage growth also ticked up, with average hourly earnings up 2.9 percent for the year, the fastest growth since the recession ended in June 2009.
“It’s been surprising that the length of the jobs recovery and the low level of the unemployment rate have not boosted wage gains more strongly, but the August figures may be a sign of accelerating wage gains,” said David Berson, chief economist at Nationwide.
Still, even when factoring for inflation, pay has been flat for the past year.
Robert Frick, a corporate economist with Navy Federal Credit Union, said that “wages have been lagging for months given the late stage of the expansion, and they’re still nullified by the increase in inflation.”
“At this point in previous expansions we’ve seen wages rising at a 3.5 percent or even above a 4 percent rate,” Frick said.
But he said with strong jobs growth and rising wages “we could be entering that sweet spot for workers that’s typical at an expansion’s peak.”
He added that the good news is that the bulk of the wage gains are coming for workers who earn lower wages, which is a good sign since pay raises have been slow in those areas during the expansion.
Jobs growth was strong in professional and business services, health care and transportation and warehousing.
Mining employment increased by 6,000 in August, with the industry adding 104,000 jobs since October 2016.
Construction employment increased by 23,000, adding 297,000 over the past year.
Manufacturing reported losses of 3,000 jobs, the auto sector lost 4,900 jobs, retailers shed 5,900 and the information sector lost 6,000 jobs.
Gus Faucher, PNC chief economist, said he expects that the unemployment rate will fall to about 3.5 percent by the beginning of next year, “although job growth will slow somewhat as businesses find it more and more difficult to hire.”
Even with the labor market and economy humming along, President Trump’s trade policies are a growing concern among U.S. businesses and lawmakers.
Trump has regularly harped on the nation’s trade deficit, arguing that bad trade deals have led to the U.S. losing in international trade.
The economy grew at a 4.2 percent pace in the April-July quarter, the fastest pace in four years, but possible trade issues could derail some of those gains.
The latest U.S. trade deficit figures showed that it widened at its fastest rate since March 2015 while monthly deficits with China and the European Union both hit new records even while Trump said lowering the trade deficit was a top priority of his administration.
Trump has slapped hefty steel and aluminum tariffs on close allies including the EU, Canada and Mexico, all of which led to retaliation tariffs on U.S. goods.
The president is reportedly soon planning to hit Chinese goods with $200 billion more in tariffs, which would bring the total to $250 billion.
Beijing so far has matched the $50 billion in tariffs and said it will levy $60 billion to retaliate against Trump’s potential next round.
Overall, economists are expecting the economy this year to grow at an annual pace of about 3 percent for the first time since 2005.
Consumer and business confidence remain steady even despite concerns about trade with plenty of jobs available for those who want to change positions or jump back into the labor market.
Updated at 10:09 a.m.