Hiring Slowed in August but Wage Gains Accelerated

The first version of the August jobs report tends to be a little weaker, only to be revised up later, said Kathy Bostjancic, chief United States financial economist at Oxford Economics. In nine of the last 10 years, the job gains for August have been revised upward, a statistical quirk caused by the return of college students to school. “The report is less anemic than it looks,” she said.

But the employment report, which is based on two surveys of employers and households that sometimes offer diverging pictures of the labor market, fits the pattern of an economy that’s lost a measure of vitality recently. The recovery is now 10 years old, making it the longest period of expansion since record keeping began.

Paul Ashworth, chief United States economist at Capital Economics, said the headline number in August was “flattered” by the census hiring. “But even allowing for that, there has been a clear slowdown in trend employment growth, with the three-month and six-month averages both at around 150,000 now, down from about 230,000 a year ago,” he said.

Making vs. Serving

One way to think about the economy would be to divide it into two parts: making and serving. The first covers businesses like manufacturing, mining and construction, while the other includes fields like health care, education, retailing and technology. The service economy is much larger, but goods-making sectors often point to what lies ahead. In recent months, manufacturing had paltry job gains even as service industries reported steady growth.

President Trump has put goods-producing workers front and center when he describes his vision of economic growth and its beneficiaries. One irony in Friday’s report is they seem to be paying the price for his trade policies.

In August, factories added just 3,000 workers, while mining and logging lost 5,000 jobs. On the service side, education and health category experienced a gain of 32,000 and employment in professional and business services was up 37,000.

Article source: https://www.nytimes.com/2019/09/06/business/economy/august-jobs-report.html?emc=rss&partner=rss