Welcome to the Labor Day edition of The Line, here I promise to keep it short and all about labor.
Payrolls Rose Nore than Expected in August
Employment rose by 187,000 last month, better than the 170,000 Dow Jones estimate. While that’s good news, monthly job gains had averaged 271,000 over the past 12 months, so the labor market is clearly softening.
Here are the other highlights from the jobs report:
- The unemployment rate rose to 3.8%, its highest level since February 2022.
- Wages rose 4.3% over the past year—slightly below forecast, but higher than the 3.3% increase in prices during that time. That’s good news for consumer spending, as wages have risen faster than prices for three straight months.
- The labor force participation rate ticked up to 62.8% but remains below its pre-pandemic level. While job openings have fallen to a two-year low, there are still 8.8 million unfilled jobs out there, so we need more people to rejoin the workforce.
- Health care added the most jobs last month (+71,000), followed by leisure and hospitality (+40,000).
- Job gains for June and July were revised down by a total of 110,000.
To sum up, this is exactly the type of report we want. It shows a cooling labor market, while hiring remains decent and the unemployment rate stays under 4%. Not too hot, not too cold, and the type of data that should keep the Fed from raising rates later this month.
